Word: loaned
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Dates: during 1980-1989
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Last week's announcement from La Paz was part of a flurry of Latin American debt developments. In another key action, the U.S. agreed to extend a $300 million loan commitment to Argentina until mid-June. The credit will go into effect once Argentina reaches agreement on an economic austerity program with the IMF. Argentina will use the U.S. cash to repay loans from four other Latin countries that enabled it to meet March 30 interest payments to its banks...
Speculation about a possible Latin American debtors' cartel that would try to dictate new loan terms to bankers has added to the jitters. In a joint statement last week, the Presidents of Brazil, Mexico, Argentina and Colombia complained that the interest rates they are being charged have reached intolerable levels. Said the four: "We do not accept seeing ourselves forced into a situation of insolvency and continuous economic crisis." While some American bankers insist that the formation of a cartel is unlikely, other moneymen remain fearful...
...which owes $96 billion, has an extra $750 million added on to its annual interest bill each time the U.S. prime and other international lending rates rise by a percentage point. De Vries suggested that the banks, together with the International Monetary Fund, should consider setting up a revolving loan pool to be used by Latin American and other countries to cope with escalating interest rates. To do the job, the credit line would have to be in the $10 billion to $20 billion range. Thurow argued that the banks should have to shoulder more of the cost...
...League of Savings Institutions: "The housing industry would be dead right now if it weren't for ARMS." Savings institutions also say they need ARMS as a hedge against interest-rate surges like the one in 1981-82, when many lenders were caught with fixed-rate loans that paid them as little as 41/2%. At the same time, the thrifts were forced to pay 10% or more in interest to depositors. Says Edwin Gray, chairman of the Federal Home Loan Bank Board: "Lenders must tie the fluctuating cost of money to lending to rates, or there will likely...
...potential problems with ARMS have led many lenders to impose voluntary limits, or caps. San Francisco's First Nationwide Savings offers an ARM with an adjustment limit of ⅜% every six months and a maximum increase of 3½% over the life of the loan. If such moves fail to make ARMS safer, Congress may have the last word. Next month the Housing Subcommittee of the House Banking Committee will hold hearings on the problems of adjustable rates. Curbs on the loans are possible, but there is unlikely to be a farewell to ARMS. -By Stephen Koepp. Reported...