In 1994, Mexico was unable to rollover its short-term debt due to declining oil prices. This led to the “Tequila Crisis,” a sharp devaluation of the Mexican peso, and a backdoor bailout of U.S. banks by the U.S. Treasury.
Caused by Mexico’s inability to rollover short-term unsecured debts.
Was ugly for investors
The bond market gave a six-month early warning
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