William Armstrong

Caribbean Leverage and Citi's Sovereign Risk

Shareholders may be taking large risks by owning banks in some developing countries but depositors aren't. Small countries almost always bail out ALL depositors when their banks go bust, even when there is no deposit insurance. You can look it up. When I worked for the British merchant bank Schroders (taken over by Citi circa 1988) we structured all of our loans to foreign banks as deposits, not loans, for precisely that reason.