
Currency and financial distress exposed vulnerabilities involving external borrowing, maturity and currency mismatches, confidence and financial institutions. Countries differed substantially. Power question: how much control did domestic borrowers have over the terms and sudden withdrawal of international finance? Avoidance question: which combinations of prudential limits, exchange arrangements and crisis responses might have reduced vulnerability without eliminating useful investment? Lab proposal: stress-test foreign-currency liabilities, capital reversals and alternative loss-sharing rules.