Amadeusz Juskowiak

Brazil criticises advisory committee structure

Brazil is not happy with the existing structure of the 14bank advisory committee which coordinates its commercial bank debt Finance Minister Dilson Funaro said

US Banks have 50 pct representation on the committee while holding only 35 pct of Brazils debt to banks he said adding This is not fair with the European and Japanese banks The committee had played a useful role in 1982 and 1983 however

Noting the often different reactions of US Japanese and European banks Funaro told journalists that Brazil might adopt an approach involving separate discussions with the regions

Since debtor nations problems were normally treated on a casebycase basis Perhaps the same principle should apply to creditors central bank president Francisco Gros said

Brazil on February 20 suspended indefinitely interest payments on 68 billion dlrs owed to commercial banks followed last week by a freeze on bank and trade credit lines deposited by foreign banks and institutions worth some 15 billion dlrs

Funaro and Gros spent two days at the end of last week in Washington talking to government officials and international agencies and will this week visit Britain France West Germany Switzerland and Italy for discussions with governments

Funaro and Gros are today meeting British Chancellor of the Exchequer Nigel Lawson Foreign Secretary Geoffrey Howe and Governor of the Bank of England Robin LeighPemberton

Bankers have estimated that Brazil owes UK Banks around 85 billion dlrs in long and medium term loans giving the UK The third largest exposure after the US And Japan

The crisis began when Brazils trade surplus its chief means of servicing its foreign debt started to decline sharply and the problem was compounded by a renewed surge in the countryrate of inflation Reserves were reported to have dropped below four billion dlrs