THE PARIS CLUB

Debt reschedulingis a form of debt reorganization in which debtors and creditorsnegotiate to defer payments of a principal and interest falling due in aspecified interval for repayment on a new schedule. Some countries find it almostimpossible to service their external debts. Recently, reschedulingexternal debts has become a widely accepted practice. Debtrescheduling occurs at the Paris club for government and private debt owed to official creditors and at the London Club for debt owed to commercialcreditors.

The Paris Club is an informal forum where countries experiencing difficultiesin paying their debts to governments and private institutions meet with their creditors to restructure these debts. The name might be quite misleading because in reality the Paris Club is not a club, nor is it a formal international organization. It has no offices, no secretariat, and above all, no charter. The Paris Club is an ad hoc institution with no legal status.

In part, the Paris Club's confidentiality policy has prevented it from becoming known to a wider public. Creditors refrain from releasing any information pertaining to their assessment of a given debtor's economic and financial situation or to the scope of debt relief granted. The onset of the international debt crisis in the early 1980s, however, brought public attention to the Paris Club and to its contribution to resolving the balance-of-payment disequilibria experienced by a growing number of developing countries and by some Central and Eastern European countries.

Over the years, the Paris Club has become a key instrument in implementing the international debt strategy. This strategy rests on two main pillars: internal reform and structural adjustment, supplemented by external financial assistance in the form of fresh money and debt relief. Despite the public's recent discovery of the Paris Club, this forum has existed since 1956, when Argentina agreed to meet in Paris with official creditors to find a mutually acceptable basis for rescheduling payments due on officially supported export credits. In the late 1950's and 1960's, Brazil, Chile, and Turkey sought similar Paris Club reschedulings. Since 1980, 54 countries have rescheduled the total of 186 debt agreements.

9. THE KINDS OF BANKS AND THEIR FUNCTIONS

In a country with a developed banking system there are different kinds of banks with widely varying activities: They are:

1.The Universal banks.Those banks (commonly found in Switzerland, West Germany and the Netherlands) are allowed to do almost anything financial, from lending other people's money to underwriting, advising on investments, stockbroking, etc. Some frown on universal banking in the belief that it creates too many conflicts of interest within one bank. Can a bank give advice on a share for which it is the underwriter and also broker and banker to the issuer? That question has not stopped foreigners from wanting a Swiss bank account and taking their Swiss banker's investment advice.

2.The ordinary deposit banks.These include the commercial or joint-stock banks, large and small, some private banks. All these have direct contact with the public which deposits money with them and draws cheques on them.

3.The savings banks.The chief function of these banks is explained by their name. In old times savings banks were banks which accepted only the deposits of small savers. They did no business with industry and provided no money-transmission service, had no cheque-drawing facilities. These distinctions between savings banks and other banks are now being eroded.

4.The merchant banks, or "acceptance houses".Merchant banks are British banks which concentrate on advising companies about raising new capital and about buying or selling other companies. They do a bit of lending too. Some of them also specialize in fund management. Merchant banking is the business carried out over the last two hundred years or so by a small number of London-based institutions. Merchant banks maintained excellent connections with leading British companies and frequently joined their boards. They played a leading role in developing the international investment management industry in London.

5. The consortium banks. A consortium bank is a bank owned by a group of other banks from a number of different countries, no one of which owns a majority share. Consortium banks were children of the Euromarket. Born in the 1970s they gave smaller banks a way into the Euromarket hand in hand with bigger bank partners. The advantage to the bigger banks lay in their easier access to the big domestic customers of the smaller banks. Some consortium banks continue to thrive by staying at the forefront of new financial techniques, acting as a type of merchant bank, some other were gobbled up by one or other of their shareholders.

Words:

underwriting n андеррайтинг, гарантирование размещения (ценных бумаг)

frown v не одобрять, относиться отрицательно

consortium bank консорциальный банк

majority share контрольный пакет акций

gobble (зд.) поглощать