§ Sir David Priceasked the Chancellor of the Exchequer what effects the decisions of Rumania and Brazil, respectively, to stop making prinicpal payments to their commercial bank creditors are having on the free world banking system; and whether he intends to propose any changes in policy to the various international financial institutions of which the United Kingdom is a member.
§ Sir Geoffrey Howe[pursuant to the reply, 20 January 1983, c. 180–81]: Brazil and Romania continue to pay interest on outstanding bank loans and discussions continue on rescheduling principal repayments due to banks during 1983. The effect of the decisions not to make principal repayments before these discussions have reached agreement is to ensure that banks with loans due 282W to be repaid this year receive equitable treatment. In theory the decisions will also have marginally reduced the liquidity of the banks involved but they have had no difficulty in obtaining sufficient liquidity from other sources.
The international financial institutions are continuing to play a key role. In particular the IMF is promoting prompt adjustment by countries with balance of payments difficulties. We need to ensure that it continues to have the resources for this task and as chairman of the IMF interim committee I am actively working to this end.