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Economic Commentary

The International Debt Situation

The precarious international debt situation clouds the economic outlook, worrying bank regulators and complicating international commerce. The world’s developing countries, excluding members of the Organization of Petroleum Exporting Countries (OPEC), have debts outstanding totaling approximately $575 billion. Of this amount, U.S. banks hold approximately $100 billion. The economic climate of the past few years has left many developing countries unable to meet the interest and principal payments on their debts according to their original loan agreements. Although no country has repudiated its debt, many have entered into negotiations with their creditors to extend repayment schedules. A default or major disruption in meeting payments on debts might shake confidence in the U.S. banking system, producing a contraction in both domestic and international bank lending. Such developments could reduce international trade and slow the pace of the economic recovery worldwide.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Humpage, Owen F. 1984. “The International Debt Situation.” Federal Reserve Bank of Cleveland, Economic Commentary 1/1/1984.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International