text: under active consideration by any potential inplemenEing body ' one particular proposal, horyever. would not be alifficult in principle to implenent as il is a modest extension of an accepted principle already having an institutional manifestation. 20l ttris is the Compensatory Financing Facility established by the lMF in ofaer to protect developing countries from the disruptive bi lance-of-payften ts effects of, inter alia, temporary fluctuatlons in international commodity pri.ces. tne racility'EJ6GiEi? Yras later extended on a tenporary basis to excesses in cereal. irnport costs. On 3 l'fay 1985, the Executive Board of the IMF renewed the cereal import facility. A modest further extension r,tould be to provide comparable credlts baving the same conditionality for excesses in interest costs' This troultl increase confidence on the part of existing and potentiaL creditors that interest payments rrouLd conlinue even if external developments beyond the control of debtors temporarily overwhelmed their ability to pay' 45. Such measures would also help to improve confidence more generally in the ba lance-of-payments outlook of aleveloping countrles. In additlon, it has been increasingty recoqnized that further international measures are appropriate to reduce the parcicular concerns of direct anal portfolio investors about non-conmerclal risks. The Code of Conduct on Transnational Corporations. one measure that would have such an effect' has been under negotiation for several years. tlost recently, a reconvened special session of che Co$nission on Transnational Corporations net in June 1985 and some progreas was made in resolving the ouEstanding issues, L/ Nr additional measure to enhance investor confidence has been proposed i.n Ehe-world Bank. namely, the establishment of a multilateral investment guarantee agency. such an agency woutd issue guaranEees against non-commercial risks and provide promotional services suPpleoenting national efforcs in this area by various home countries of investors. Ongoing discussions
analysis: The text discusses a proposal for a modest extension of an existing principle, related to the Compensatory Financing Facility established by the International Monetary Fund (IMF) to protect developing countries from balance-of-payments disruptions. The proposal aims to provide comparable credits for excesses in interest costs, which would increase confidence in the balance-of-payments outlook of developing countries and reduce concerns of direct and portfolio investors about non-commercial risks.