The Free State
"Man, in a word, has no nature. What he has is - history."

Friday, February 06, 2009

Yugoslav Subprimes

I'm reading about the collapse of Yugoslavia. On one of the factors:

One could readily argue that the level of debt now reached [in Yugoslavia], of about $20 billion, had rendered fundamental reform impossible... For years, the large Bosnian agro-form "Agrokomerc" had operated thoughout Yugoslavia as well as abroad... With the gathering economic uncertainty, Agrokomerc's business dealings began to include financial speculation. This, in turn, led to losses; these were concelaed by uncovered promissory notes which were accepted as collateral for credits by various banks, including Lbjuljanksa Bank, along with some Bosnian banks. Finally, in 1987 this house of credit collapsed when several banks, including Ljubljanska Banka, could not or would not continue to underwrite Agrokomerc.

Viktor Meier, Yugoslavia: A History of its Demise (1999), p. 43

This scandal led to the fall of the existing communist leaders in Bosnia and anti-Muslim sentiment in the rest of Yugoslavia. It was not the sole or even primary factor in the collapse, but it is nonetheless very eery.