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Never have so many countries owed so much money to so many banks, with so little prospect of repayment. For more than two years the international financial system has staggered under the burden of a so-called "debt crisis," in which a group of non-oil developing countries (NODC's) and their lenders have struggled to prevent default on a level of external debt that is by almost any measure excessive. The most dramatic debt figures are those for the major Latin American borrowers. By the beginning of 1985, Brazil's estimated external debt was almost $100 billion, Mexico's in excess of $96 billion, and Argentina's at least $45 billion. The nine largest U.S. banks have over 110% of their capital exposed in loans to these three debtor states, and over 200% exposed to NODC's as a whole. Many of the outstanding bank loans have required some form of renegotiation in 1983 and 1984. Although prospects for the debtor states to continue to pay their debts have brightened considerably due to the worldwide economic recovery, sober analysts nonetheless warn that the crisis has deeper implications and may remain a concern for several years.
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