Debt Bomb Defused?

Brazil and banks reach a pact to end the crisis in Latin America

Like many a supposed doomsday weapon, the "debt bomb" has turned out to be a dud. That seems to be true in Latin America, anyway -- and that was where countries had piled up by far the greatest amount of the international debt that sparked despair a decade ago. Experts feared that the ious would crush economies in the Third World, while defaults on the loans would bring down big banks and cause a First World financial crisis.

One by one, however, the Latin countries have been negotiating agreements under which their creditors agreed to accept smaller repayments. The countries in...

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