The IMF and the debt crisis: Effects on the social conditions in Brazil and Mexico

In August of 1982, Mexico, a major oil producer, faced financial illiquidity. with this announcement, major creditors realized that they shared with borrowers the situation of being caught in a major debt trap. A coordinated effort by the international Monetary Fund (IMF) and the Bank of International Settlements (BIS) managed to restore debtors' ability to resume short-term payment and, thus, averted a financial world panic. This did not constitute a solution to a crisis affecting most third world countries.