The paper represents a remarkable effort to push outward the limits of static ratio analysis for the purpose of judging commercial loan applications. I found the task of reviewing this paper by Professor Altman and his colleagues from CESA (Center for Management Education) a very useful experience because it gave me an opportunity to reacquaint myself with an area of finance to which I had paid very little attention for some time. Hopefully, these comments are still useful despite my lack of recent experience.

For generations government regulations and business traditions confined financial activities within national borders. Leaders and borrowers maintained relationships with domestic bankers, who offered little in the way of innovation or advantage. But the abolition of fixed exchange rates, along with hyper-inflation in the 1970s spelled the beginning of the end for this system. By the 1980s the financial game in the UK, Japan and USA was being played ith some important new rules, and by many new players. The old world of relationship banking had given way to financial transactions based upon price and product innovation. Macroeconomic forces and the policies of central bankers have profoundly altered international trade, exchange rates, and the flow of capital around the world. David Meerschwam explains these economic forces, describes the dramatic effects of de-regulation in the major centres of finance, and shows how financial services firms have had to alter their strategies and develop new skills in order to compete.

Serie sof papers submitted at the Monetary Conference held by the Graduate Institute of International Studies, Fairleigh Dickinson University, at its Wroxton College Campus by a group of distinguished economists and experts that is a close analysis of the dollar crisis.