ivate banks which were overflowing with eurodollars and had little conditionalities attached to loan as compared to the IMF ( which even otherwise was not ready to meet this big a loan demand ) . Many of these loans were sanctioned without considering the economic fundamentals of the borrowing country and many a times banks went much over their advisable limits of lending .
             By early 70s the recession in US economy coupled with its artificially stablised dollar , which in turn lowered the demand for imports of goods produced in these debt ridden LDCs . The conditions worsened in the wake of the oil shock and subsequent flight of capital out of the country leaving the countries like Mexico on verge of defaulting. The banks based in developed countries forced US to intervene and mediate a solution in the form of Baker plan and later in breddy plan.
             Debt crisis - an indicator of a new type of Interdependence and vulnerability of LDCs in a world of laissez fare
             This episode brings forth the fact that many a times even
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