Back from the Brink

Brazil has the dubious distinction of being the largest international debtor in the developing world; the country's public institutions and private businesses owe an estimated $87 billion to foreign creditors, $67 billion of it to banks. As TIME's Board of Economists met last week, some were fearful that the cash-strapped South American nation would default, an event that could shatter the increasingly fragile international banking system. The possibility sent world financial leaders scrambling to prevent a crisis.

Banks lend to Brazil, as to any borrower, out of confidence that they will be repaid. When that faith erodes, for whatever reason, some...

Want the full story?

Subscribe Now


Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!