The international capital market:
negotiable secureties continue
to gain ground.
interest and protection. After all, it was precisely
the world recession, the accompanying cut in
export opportunities for the debtor countries
and the sudden rise in interest rates which lay at
the root of the crisis. A reverse movement
leading to more growth and lower interest rates
can do much to relieve the debt problem. The
measures adopted in Europe, the USA and
Japan at the end of 1985 offer hope.
The international credit and capital market can
be said to have reached a watershed in 1985. Not
only did the market as a whole undergo
considerable expansion, but something akin to a
revolution occurred in the manner in which the
market operates and in the products which are
traded in it.
Proof of the expansion lies in the rise in the sum
of syndicated Eurocurrency loans, back-up
facilities and debenture loans taken up, from
164 billion in 1984 to around 225 billion.
As far as the composition of the market is con
cerned, issues of negotiable paper - debenture
loans and notes with all manner of backing by
bank commitments - surged ahead at the
expense of those of Eurocurrency loans.
Moreover, an increasing proportion of the latter
were transferable.
A particularly striking feature was the rapid
growth of back-up facilities, of which Note
Issuance Facilities (NIFs) or Revolving Under-
There was a slight improvement in the position of a number of
developing countries in 1985.
