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When the bubble burst in 1990, bad debts brought the banking system close to collapse and the nation fell into a decade of recession and deflation.
Banks that have suffered from that sort of corrupt and incompetent management must now grapple with the unexpected exposure to foreign-currency debts brought on by the devaluation.Sorting out this mess is likely to take several years.
Lewis bought his near 23% holding in M&B from colourful businessman Robert Tchenguiz, who needed to sell his stake to meet margin calls on his debts brought on by the financial crisis.
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As a result, such borrowers find it easier to service their debts, bringing spreads further down, and so on.
In an attempt to avert a massive run on the financial system, Ireland's government guaranteed all bank debts — saddling the government itself with those debts, bringing its own solvency into question.
It is possible that Vivendi's auditors will ask for a further writedown when the group closes its half-year books at the end of June.To maintain Vivendi's credibility in financial markets Mr Messier has said that he will significantly reduce its debts, bringing its debt/ebitda ratio to 3 by the end of this year.
A big increase in social spending, paid for at first by a high oil price and then by defaulting on debt, brought Mr Correa popular acclaim.
This week has been the slowest for the issuance of corporate debt since May 1990, with just $2.5 billion of global investment grade corporate debt brought to the market, according to Thomson Reuters.
It was excessive debt brought on by too-easy credit that brought down the American economy and allowed some European countries to borrow money they will never be able to pay back.
Mr Fry says: "My own bipolar condition has caused me to go on many giddy spending sprees so I have first-hand experience of the difficulties of debt brought on by poor mental health.
Indeed, in many ways, Peru is better off than neighbors like Colombia, with its intensifying drug-fueled war, and Argentina, where default on a $141 billion debt brought down the government.
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Justyna Jupowicz-Kozak
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