VOLCKER URGES QUICK AID TO DEBTOR NATIONS
Federal Reserve Board Chairman Paul
Volcker said that debtor nations have made much progress in
laying the groundwork for economic growth, but a solution to
world debt difficulties was endangered by inaction on new
financing.
    "There is clearly a danger that adequate financing
arrangements are not being negotiated and put in place in a
timely way," Volcker told the Senate Banking Committee.
    The borrowing countries need to be able to proceed with
confidence that the necessary funds will be available to them,
he said.
    Brazil has the potential for becoming a leading world
economic power, but it is in a difficult position today,
Volcker said.
    He said it will take a concerted effort to regularize
Brazil's external payments.
    "The key prerequisite is clearly in the hands of Brazilian
authorities," he said.
    Both Brazil and its creditors have a strong incentive to
work together, Volcker said.
    Regarding trade imbalances, Volcker said that it was
critically important that markets be kept open by the
industrial nations.
    In addition, the United States must reduce its budget
deficit and foreign nations need to provide stimulus to their
domestic economies, Volcker said.
    "We need time for those actions and the earlier
depreciation to work their effects," he said.

 Reuter
