Amadeusz Juskowiak

Banks express grave concern on brazil debt move

Brazils 14bank advisory committee expressed grave concern to chief debt negotiator Antonio Padua de Seixas over the countrys suspension of interest payments according to a telex from committee chairman Citibank to creditor banks worldwide

Bankers said the diplomatic phrase belied the deep anger and frustration on the committee over Brazils unilateral move last Friday and its subsequent freeze on some 15 billion dlrs of shortterm trade and interbank lines

Seixas director of the Brazilian central banks foreign debt department met the full panel on Tuesday and Wednesday

Seixas who met again this morning with senior Citibank executive William Rhodes and representatives from committee vicechairmen Morgan Guaranty Trust Co and Lloyds Bank Plc told the banks that the government was preparing a telex to explain and clarify the freeze on shortterm credits

The telex could be sent to creditors as early as today bankers said

Despite the rising tempers bankers said there are no plans for Brazilian finance minister Dilson Funaro to meet commercial bankers during his trip to Washington on Friday and Saturday

Funaro will be explaining Brazils actions to US Treasury Secretary James Baker Federal Reserve Board chairman Paul Volcker and International Monetary Fund managing director Michel Camdessus before travelling to Europe at the weekend

Meanwhile bankers were to hear in New York this afternoon what impact Brazils hard line would have on Argentina with an initial presentation from Argentine Treasury Secretary Mario Brodersohn on his countrys request for 215 billion dlrs in new loans and a multiyear rescheduling agreement Argentina has threatened to follow Brazil in declaring a payments moratorium if the banks do not grant its request

Reuter