Volcker Urges More Loans to Latin Debtors: Addresses Bankers Volcker Urges Lending Boost to Latin...
Federal Reserve Board Chairman Paul A. Volcker yesterday urged commercial banks to increase lending to Latin American debtor nations to stimulate economic growth in those countries, and said that it would require a relatively small boost in lending.</br></br>Volcker said that the U.S. government's plan to encourage growth in the economies of Latin American debtor nations would involve only a 2.5 percent to 3 percent yearly increase in bank lending to the region.</br></br>That is a far slower rate than the rate at which banks boosted their loans to Latin America in the late 1970s and early 1980s.</br></br>Volcker said that the $20 billion U.S. Treasury Secretary James A. Baker III wants banks to lend over the next three years is about what Mexico alone borrowed from commercial banks in 1981.</br></br>The Federal Reserve chairman told reporters that ÛÏeverybody will be better offÛ if banks cooperate with the debt plan unveiled by Baker earlier this month during the annual meetings of the World Bank and International Monetary Fund in Seoul.