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Baker Lauds Citicorp Move, Says It Helps His Debt Plan

May 21, 1987|Associated Press

WASHINGTON — Treasury Secretary James A. Baker III said Wednesday that the Reagan Administration remains committed to its program to solve the Third World debt crisis and believes actions by Citicorp will enhance, not hinder, those efforts.

The nation's largest bank announced on Tuesday that it planned to set aside $3 billion to cover possible losses on foreign loans, a move that some observers said could spell trouble for the so-called Baker debt initiative.

Baker's debt plan, which has met with only limited success since it was unveiled in October, 1985, calls for new commercial bank lending to generate growth in heavily indebted countries.

Baker, in remarks prepared for delivery to the Iron and Steel Institute Wednesday night, said he views Citicorp's action as a positive step, noting that the bank repeated its support for the Administration's debt strategy.

"I remain absolutely convinced that the only valid approach to the developing nations' debt problems is to combine . . . economic reforms by the borrower nations, new lending from the multilateral institutions and addtional private capital," Baker said.

Earlier in the day, several executives sounded a common theme that while profits have reappeared, the steel industry's longstanding problems are not solved.

Several executives called for an extension of steel import quotas, or voluntary restraint agreements, beyond their scheduled expiration in 1989.

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