The article explores why countries face financial crises and have high levels of debt and reserves. It uses a model to show how a country's growth and banking system affect its ability to repay debts. The findings show that when a country can't borrow money internationally, its banks need more cash, leading to potential bank runs. This creates pressure to repay debts. The model also predicts that countries can face both banking and debt crises at the same time. International reserves act like a safety net, helping prevent bank runs and giving countries more room to manage their debts. Overall, the model can explain why countries have certain levels of debt and reserves.