Wikipedia:Reference desk/Archives/Humanities/2023 February 27
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February 27
[edit]What is a debtors' cartel ?
[edit]I mean in the scope of international relations not individuals or corporations/legal entities of that kind -- if there is such an equivalent. All of the online resources on this topic assume the reader already has an understanding. Please advise what this term means and what the consequences are such as the Argentina-Brazil-Chile debt cartel of the 1980s Fishing Publication (talk) 13:40, 27 February 2023 (UTC)
- Let's say a government borrows money internationally, say from a few banks and a multilateral regional lending body such as the American Development Bank. Then, the government falls into arrears and cannot repay the interest due. The lenders may group together to present the borrowing government with a set of conditions under which they – the lenders – will reschedule or reduce the debt. Because the borrowing government doesn't have many other options, this group may be thought of as a cartel: a group with whom one must deal, because they hold all the cards. The term implies that the lenders, not the defaulting borrower, are the bad guys. DOR (ex-HK) (talk) 14:46, 27 February 2023 (UTC)
- I presume, then, that a "debtors' cartel" (which is the question originally asked) would be the reverse: when debtor nations would combine to offer similar terms to the banks, countries and international institutions to whom the debtors owe money. But that's just my own conclusion; it would be nice if someone with more specific information could answer the original question. —— Shakescene (talk) 15:01, 27 February 2023 (UTC)
- The meaning of debtors and creditors is very clear. --Cookatoo.ergo.ZooM (talk) 18:26, 27 February 2023 (UTC)
- Indeed of course it is very clear, I inquired about the meaning and consequence of this particular practice in finance Fishing Publication (talk) 19:08, 27 February 2023 (UTC)
- Courtesy Perplexity.ai:
| “ | A debtors' cartel is a group of countries that have borrowed money and are working together to negotiate better terms with their creditors[1][2][3]
This can include suspending payments or rescheduling debts.[4] However, it is unclear whether such cartels actually exist.[5] |
” |
- --136.56.52.157 (talk) 19:08, 27 February 2023 (UTC)
- "Borrow a million dollars, and the bank owns you. Borrow a billion dollars, and you own the bank" (Quote with disputed source and many variations) -- Verbarson talkedits 21:20, 27 February 2023 (UTC)
References
- ^ Laura Rama Iglesias; Alison Schultz. "What Kinds of Challenges Does a Debtors' Cartel Face?". kobra.uni-kassel.de. University of Kasse.
- ^ Sleight, Sara (September 25, 2007). "LATIN AMERICA'S DEBT The Specter of a Debtors' Cartel". NACLA.
- ^ O'Donnell, Guillermo (1987). "Brazil's Failure: What Future for Debtors' Cartels?". Third World Quarterly. pp. 1157–1166.
- ^ "Syndicated Lending and the Creditors' Cartel". academic.oup.com. Princeton University Press.
- ^ Lewis, Paul (19 June 1984). "A 'CARTEL' OF DEBTORS IS DOUBTED". The New York Times.
Apologies. The concept is so bizarre that my brain decided it must be a gang of lenders, not borrowers. A debtors (borrowers) cartel was mooted for Latin America in the 1980s, but as soon as anything like serious talks began to emerge, the first to cave in got the best terms. In other words, the threat of a debtors cartel -- a group of borrowers who all agree not to repay their loans unless all of them get better terms -- helped improve the repayment conditions. DOR (ex-HK) (talk) 17:39, 28 February 2023 (UTC)