For Latin America, the 1980s were a “Lost Decade.” Many Latin American countries failed to make the payments on their foreign debt.

In the 1970s, oil spiked to record highs twice, which led to many Latin American countries experiencing current account deficits.

Banks began to stop foreign lending as they tried to collect on their existing loans. The sudden cut-off of lending sent many Latin American economies into deep recessions.

Despite evidence of the problem, most involved did not recognize the problem until it had become a crisis.