ABSTRACT
Third World debts are relatively secure and are unlikely to be rescheduled en masse. There are serious obstacles to smooth debt servicing. Richard Hill, chairman of the First National Bank of Boston, offers a particularly clear appraisal of the International Monetary Fund's (IMF) role: "Sophisticated borrowers and lenders increasingly look to the Fund to set standards for economic stabilization and adjustment. Ironically, the most forceful advocates are the US commercial banks, the same banks that vigorously objected to a strong IMF at its inception. The commercial lenders, attentive to asset management, liked access to the IMF's detailed country analyses and the data on which they were based. This issue was raised in 1977 when Gabriel Hauge, chairman of Manufacturers Hanover Trust, suggested a formal connection between commercial banks and the IMF. The growing cooperation between the Fund and large commercial banks hinges on the IMF's crucial role in providing liquidity and discipline in debt crises.
