The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Cavallo’s high-stakes confidence game

Domingo Cavallo

When Argentina cancelled a domestic bond auction last month - its government refused to pay the interest rates the market demanded - fears about the country's ability to meet its debts were revived. The government, mired in recession for almost three years, has debt of at least $125 billion. Argentina would need to cut imports in half or boost exports by half to service that overhang.

"Everything coming out of the country right now is aimed at avoiding the double-D, by which I mean default and devaluation," says Morris Goldstein of the Institute for International Economics in Washington. "I hope they make it, but so far it doesn't look as if they will. They're not putting forward enough to do the job."

Few expect contagion on the scale that knocked out Long-Term Capital Management almost three years ago. "We're not likely to see any balance-sheet-based fire selling," predicts Michael Gavin, head of Latin American research for UBS Warburg.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree