Magazine article American Banker

BankAmerica Steps into Soviet Role; Mediator in Debt Negotiations Has Limited Exposure

Magazine article American Banker

BankAmerica Steps into Soviet Role; Mediator in Debt Negotiations Has Limited Exposure

Article excerpt

LONDON -- BankAmerica Corp. has been recruited as a mediator in the international effort to help resolve the Soviet debt crisis.

The U.S. bank, part of a group of Western financial institutions in negotiations with the Soviet foreign trade bank over loan repayment, will head a new subcommittee to assess economic and technical issues involving the disintegrating union's debt position.

More Room to Maneuver

The decision came at a meeting in Frankfurt Tuesday where the banks agreed to a three-month deferral of principal payments on Soviet borrowings. The action is intended to give the Soviets more time to work out ways of resuming full debt servicing.

Soviet overseas debt totals an estimated $68 billion, about a third of which is owed to banks.

The Group of Seven industrial nations already have set a one-year deferral of principal paymetns by Moscow on intergovernmental debt. They are the Britain, Canada, France, Germany, Italy, Japan, and the United States.

The meeting comprised the Soviet Foreign Trade Bank, Vneshekonombank, and representatives of 12 creditor banks, led by Deutsche Bank, chairman of the bank debt steering committee.

The BankAmerica officer that will chair the subcommittee is Dan McGovern, vice president in the bank's economic policy research unit.

"Our bank has had a fair amount of experience in the area of sovereign debt problems, including the arrangements for Mexico and Poland, and our expertise is being used in connection with the U. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.