TREASURY'S BAKER CALLS FOR MORE BANK FLEXIBILITY
Treasury Secretary James Baker said
that commercial banks need to develop more flexibility in their
concerted lending mechanisms "to help assure continued
participation in new money packages."
    He said that major debtor nations need to be able to count
on receiving timely disbursements on new loans essential to
support well-conceived economic programs.
    His remarks were made to the afternoon session of the
International Monetary Fund's policy making Interim Committee.
    Baker said, "The sense of urgency and willingness to
cooperate in support of a larger general interest that helped
to carry us through the difficult crisis period of 1982 and
1983 is now less evident."
    He said to address this problem, it is important for the
commercial banks to "develop a menu of alternative new money 
options from which all banks with debt exposure can choose in
providing continuing support for debtor reforms."
    He said the "continued implementation of the debt strategy
may well rest on their doing so."
    Baker also said that growth prospects for the lowest income
countries remain an issue of "critical concern to the United
States."
    He said that he intended to address the problem of poor
country prospects in greater detail at tomorrow's meeting of
the joint IMF-World Bank Devlopment Committee.
    Baker said, however, that ministers should guard against
what appear to be magical solutions to the complex debt
problem.
    "I want to stress the need for all to guard against the
ephemeral attraction of magical solutions, which may appear as
tantalizing alternatives to the rigorous realities of grappling
with our debt problems," he said.
    But he emphasized that the only lasting progress is to
approach each situation on a case-by-case basis, "bringing to
bear the policies and financing needed to bring the economy
back to sustained economic growth."
 Reuter
