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To: Broken_Clock who wrote (11969)	5/21/1998 5:48:00 AM
From: Alex	Respond to of 116823

Deutsche Fears 'Worst' in Indonesia German Bank May Set Aside More Reserves and Warns of Further Crises ------------------------------------------------------------------------ Compiled by Our Staff From Dispatches ------------------------------------------------------------------------ FRANKFURT - Deutsche Bank AG, Germany's largest bank, said Wednesday that the Asian financial crisis was the biggest risk facing the world economy and that the troubles there were far from over. Rolf Breuer, the bank's chief executive, said his company was ''prepared for the worst'' in Indonesia and said it may set aside more money this year to cover its losses there. The bank set aside 1.1 billion Deutsche marks ($617 million) in 1997 to cover losses in Indonesia, Thailand, South Korea and Malaysia, countries that weathered severe currency devaluations last year. At the time, Deutsche Bank said the sum was enough to cover all anticipated losses in the region. But on Wednesday, Mr. Breuer told shareholders that, while the money set aside for Thailand, South Korea and Malaysia was ''probably enough,'' this was not the case with Indonesia. ''Now, after half a year, we cannot sound the all-clear, and we are extremely worried,'' Mr. Breuer said. Deutsche Bank said Tuesday that meetings with Indonesia and creditor banks scheduled for next week in Frankfurt had been delayed by a week. Indonesian companies and banks owe $80.2 billion in foreign-currency debt to banks around the world, according to Indonesia's central bank. Many analysts expect the lenders will ultimately be forced to write off a large part of that debt, perhaps as much as $56 billion. Deutsche Bank is leading the talks along with Chase Manhattan Corp. and Bank of Tokyo-Mitsubishi. Deutsche Bank last week closed its operations in Indonesia and evacuated its staff to Singapore. The bank said it may reopen its two branches in Indonesia on Friday if conditions permit. ''We still believe in Asia overall, but we don't believe the tiger economies will be able to return to their former economic growth rates in the next two or three years,'' Mr. Breuer told shareholders at the bank's annual meeting. Mr. Breuer said the U.S. economy was proving to be ''surprisingly resistant'' to the Asian crisis. He predicted that U.S. interest rates would rise in the second half of 1998 in view of growing wage pressures and stabilizing commodity prices. Separately, Deutsche Bank said it had made no progress in its plan to acquire a French financial institution and reiterated that Deutsche was so large that it did not need to merge with another bank. It said financial mergers under way in the United States and Japan stemmed from motives that did not apply in Germany. Mr. Breuer said Deutsche Bank's aim to fill a ''blank spot'' in Europe by establishing a strong foothold in France had run into difficulty because of French reluctance to sell off what officials viewed as the country's ''crown jewels.'' He said national pride had made French officials reluctant to allow a foreign bank to buy a French one without a commensurate French acquisition abroad.