Agreements Used by the Federal Reserve Bank of New York in Reserve Asset Investment and Monetary Policy
Thomas C. Baxter, Jr.1
Robert B. Toomey
"...Some central banks (most significantly those of Portugal, Yugoslavia, and Malaysia) experienced material losses after the failure of Drexel. These central banks had used Drexel as their agent in attempts to generate return on holdings in gold. When Drexel collapsed, these central banks, just as other market participants that had dealings with Drexel, were forced to participate in the insolvency wind-up of Drexel and eventually received back significantly less than their invested principal...."