Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme/No Pennies -- Ignore unavailable to you. Want to Upgrade?

To: FDHIII who wrote (5414)	10/5/1998 10:04:00 PM
From: TokyoMex	Read Replies (3) \| Respond to of 119973

Monday October 5, 9:47 pm Eastern Time World Bank management backs emergency loan plan By Adam Entous WASHINGTON, Oct 5 (Reuters) - The World Bank said on Monday its management had agreed to set up a new short-term emergency loan facility to rush cash to countries hit by fast-moving financial crises. The new facility, which must still be approved by the bank's board, would offer crisis-hit countries in Latin America and elsewhere ''emergency structural adjustment'' loans (ESALs) at higher interest rates than existing World Bank credits. The plan, part of the international community's response to a deepening financial crisis spreading from emerging markets to the industrialized world, would also disburse money to countries more quickly and under shorter repayment terms. World Bank officials would not be specific about which countries could benefit from the loans or how much money might be made available, but the new facility could be in place in time to help Latin American economies battered by contagion. The World Bank and the International Monetary Fund have been under pressure from the United States and other Western powers to find new ways to rush money to countries caught up in the current financial crisis, which started in Asia last year and then spread to Russia. Now Brazil and other Latin American economies are on the brink. In a statement issued on Saturday, Group of Seven finance ministers and central bank governors called on the World Bank to ''develop a new emergency capacity with a particular focus on support for the vulnerable groups in society and for financial sector restructuring.'' Bank management had initially resisted calls for the new facility because they feared it could diminish their role as a development agency concentrating on reducing poverty. The World Bank and the IMF have doled out record amounts of money over the last year to crisis-hit Asia and Russia, putting unprecedented strain on their financial resources. The World Bank already offers structural adjustment loans to support broad economic policy reform -- typically the IMF's domain. Because of the crisis in Asia, structural adjustment lending rose to $8.29 billion in fiscal year 1998, from $1.30 billion in 1997 and $350 million in 1996. At first World Bank officials said that, if countries insisted on creating a new emergency facility like ESAL, the lending agency would need a cash injection from member states, an unpopular option especially for Washington. Republicans in the U.S. House of Representatives have been holding $18 billion for the IMF hostage for months, and might do the same if the U.S. administration asked them to give more cash to the World Bank. ''We are not a lender of last resort or a liquidity funder. We don't make loans for short-term,'' World Bank President James Wolfensohn told a news conference last week. But the bank said on Monday management had agreed to support the emergency ESAL facility, provided there were strict limits on lending volumes to make sure longer-term World Bank loan programs were not affected. ''There was a limit to the extent to which we could provide liquidity,'' Wolfensohn told a news conference. ''I think it's a significant amount, but it's not an amount which will instantly cause to either review our conservative approach or to seek instant capital. But I have drawn the line in terms of what the bank should be doing.'' Wolfensohn said ''rather expensive'' five-year ESAL loans would have to be repaid within three years. ''If one of our clients has an immediate problem...to a modest degree we can give some additional help,'' he said. ''What I don't want to do is to encourage it so I have put a very high rate on it, much to the distress of some of our clients.''