Argentina Crisis Related to Greece's Case

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My paper will discusses about the link between both crisis in Greece and Argentina, what we have learnt since this crisis and what are the common mistakes committed by both. Economic environment

“Eleven years after the financial crisis of 2001, which led to the largest default in history (75 billion Euros), Argentina has reimbursed, the August 3, the last holders of securities issued during the freezing of assets, called "corralito" ("small enclosure").

The final explosion occurs when the Minister of Economy Domingo Cavallo announced on 1 December 2001, before the flight of capital and the liquidity crisis, the implementation of corralito, limiting bank withdrawals to 250 pesos a week
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Depositors start to withdraw their bank deposits, raising fears of a liquidity crisis for many financial institutions.

People of Argentina didn’t trust about the system, making a liquidity crisis due to the higher amount of withdrawals especially caused by a lack of confidence or unexpected need for cash, the crisis of confidence in general lead to a liquidity crisis. Banking system was trapped in a vicious cycle of untrustworthiness, impacts were symptomatic as quoting “you could see customers queuing to withdraw their savings, liquidating their bank accounts frantically and when people began to understand that they could probably not recover fully their savings that people began fights and that we understand the effects of the crisis”. A system risks has spread into the system and contagion has becoming effective quickly due to the fall of confidence of people and the incapacity to bank to pay back people. In addition, the Argentinean banks are interconnected and shared risks and when the first one declare bankruptcy, the assets contained in the banks found themselves insolvent, and thus risked bankruptcy and the generalized bankruptcy of the system.

Recession causes strikes and decrease of public income, which has as its corollary the increase in public debt, and the fact that they must pay back the debt in peso, due to his withdrawal of

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