BANKS EXPRESS GRAVE CONCERN ON BRAZIL DEBT MOVES
Brazil's 14-bank advisory committee
expressed "grave concern" to chief debt negotiator Antonio
Padua de Seixas over the country's 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 Brazil's unilateral move
last Friday and its subsequent freeze on some 15 billion dlrs
of short-term trade and interbank lines.
    Seixas, director of the Brazilian central bank's 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
vice-chairmen 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 short-term 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 Brazil's actions to U.S. 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 Brazil's hard line would have on Argentina, with an
initial presentation from Argentine Treasury Secretary Mario
Brodersohn on his country's request for 2.15 billion dlrs in
new loans and a multi-year rescheduling agreement. Argentina
has threatened to emulate Brazil's payments moratorium if the
banks do not grant its request.
 Reuter
