ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Did BIS Regulations Shorten Debt Maturity in Developing Countries?

The Bank for International Settlement's 1998 Capital Accord recommends a smaller risk weight for short-term exposures to developing countries than for exposures with more than one year maturity. This paper shows that such differential treatment of risk may have been one of the factors behind the rapid growth of short-term banking debt to developing countries in the 1990s, believed to be one of the major causes of the financial crises in Asia, Russia and Brazil.
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