…a “leveraged loan” usually means there’s a contract to sell a natural resource for a very cheap price (far below the market rate) if the loan isn’t paid back. That’s the “leverage” that makes the loan (usually to an otherwise poor country) “good” in the eyes of the world bank.
So that’s what happens. If they refuse to give up the goods, they’ll get down graded, possibly refused global banking services, or put on an embargo list… And they’ll probably arrange ownership of the mine/refinery/wells and have them secured with private security forces anyways.
Did the citizens of that country take the loan? No
Did they benefit at all from the loan? No
Did the world bank make any effort to ensure the above were answered ‘yes’? No
When you make a leveraged loan are you supposed to be guaranteed that the it was risk free? No
If leveraged loans could be made risk-free ‘breal your legs’ style the way the world bank does to countries, banks would be offering loans to every punter who wanted to bet on the dogs.
So what?
What’s the world bank going to do if the countries decide not to pay back the loan?
It’s just stupid for the countries to even pay it back
…a “leveraged loan” usually means there’s a contract to sell a natural resource for a very cheap price (far below the market rate) if the loan isn’t paid back. That’s the “leverage” that makes the loan (usually to an otherwise poor country) “good” in the eyes of the world bank.
So that’s what happens. If they refuse to give up the goods, they’ll get down graded, possibly refused global banking services, or put on an embargo list… And they’ll probably arrange ownership of the mine/refinery/wells and have them secured with private security forces anyways.
Did the citizens of that country take the loan? No
Did they benefit at all from the loan? No
Did the world bank make any effort to ensure the above were answered ‘yes’? No
When you make a leveraged loan are you supposed to be guaranteed that the it was risk free? No
If leveraged loans could be made risk-free ‘breal your legs’ style the way the world bank does to countries, banks would be offering loans to every punter who wanted to bet on the dogs.
It’s always great fun when people who have absolutely zero fucking clue how something works declare it “stupid”.