US policymakers should implement Brady Plan-like measures
The Federal Reserve and the US Treasury should implement a specific form of cash-flow enhancement that has the potential to increase market liquidity, as was the case of Brady Plan, new research from the Boston Federal Reserve posits.
The research analyses the Latin American debt episode and finds that just injecting liquidity did not revive the market for emerging-market debt. It shows that the Brady Plan recognised that both borrowers and creditors were insolvent and offered a menu of options
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