The Baker Plan, and its successor the Brady Plan, represent the official US Government policy response to the international debt crisis which erupted in August 1982 when Mexico announced it was unable to service its foreign debts. However, Baker and Brady notwithstanding, the debt crisis has not abated, and the debtor countries are in many respects worse off than when it started. In fact, all the signs suggest that a resolution of the crisis is still a long way off. This clearly has enormous implications for the current international debt strategy, given that Bach Plan in its turn, was hailed as a major breakthrough at the time of its introduction. This paper outlines briefly the nature and development of the crisis, not in order to apportion blame or responsibility for it, but rather to identify the principal players in this long-running saga, and the constraints and considerations which determine their scope for action. Secondly, it outlines the main features, objectives and operational requirements of both the Baker and the Brady Plan. Within these broad parameters, it focusses on the role, relationship and response of the commercial banks to them in order to assess their impact on and contribution to the course and outcome of the crisis.
