Banks were willing to swap LDC loans for Brady bonds because:

Question

Quizplus · Accepted Answer

Banks were willing to swap LDC loans for Brady bonds because the bonds were marketable and the loans were not. This allowed banks to get rid of illiquid assets and free up capital to make new loans. The other options are not accurate as Brady bonds typically had lower interest rates than the original loans and were not variable rate securities. Additionally, the bonds were collateralized by the underlying loans.

Banks Were Willing to Swap LDC Loans for Brady Bonds