§286cc — Title 22 Foreign Relations and Intercourse | U.S. Code

Summary

The President must tell the Secretary of the Treasury, the Secretary of State, and other federal officials, and ask the Chair of the Federal Reserve Board, to do everything they can to get other countries to make plans to fix problems paying their bills and repaying debts to private banks. Those plans should try to protect worldwide economic growth, world trade, jobs, and bank stability, and should aim to reduce the chance of civil unrest. The United States Executive Director at the Fund must push for Fund rules that convert short-term, high-interest bank debt into longer, lower-interest debt; make sure annual external debt service (principal, interest, points, fees, and other charges) is a manageable share of a country’s expected yearly export earnings; and require the Fund to consider how many countries need help and the overall effect on global growth, trade, exports, jobs, and bank solvency. The U.S. Executive Director must oppose Fund help for any country whose annual external debt service is more than 85 percent of its annual export earnings, unless the Secretary of the Treasury first provides written documentation to the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives showing (1) the debt will be restructured into long-term loans with much narrower interest spreads than the average spreads from bank debt reschedulings negotiated between August 1982 and August 1983 for countries getting Fund help, while still allowing needed private financing, (2) the debt service is manageable, and (3) the program will not harm international growth, trade, exports, jobs, or bank solvency. The 85 percent rule can be waived if the Secretary of the Treasury certifies in writing to those same committees that there is an emergency needing an immediate short-term loan, or a sudden drop in export earnings raises the ratio above 85 percent for no more than one year, or other extraordinary circumstances exist.

Title 22, §286cc

Foreign Relations and Intercourse — Source: USLM XML via OLRC

(a)(1)The President shall instruct the Secretary of the Treasury, the Secretary of State, and other appropriate Federal officials, and shall request the Chairman of the Board of Governors of the Federal Reserve System, to use all appropriate means to encourage countries to formulate economic adjustment programs to deal with their balance of payment difficulties and external debt owed to private banks.

(2)Such economic adjustment programs should be designed to safeguard, to the maximum extent feasible, international economic growth, world trade, employment, and the long-term solvency of banks, and to minimize the likelihood of civil disturbances in countries needing economic adjustment programs.

(b)To ensure the effectiveness of economic adjustment programs supported by Fund resources—

(1)the United States Executive Director of the Fund shall recommend and shall work for changes in Fund guidelines, policies, and decisions which would—

(A)convert short-term bank debt which was made at high interest rates into long-term debt at lower rates of interest;

(B)assure that the annual external debt service, which shall include principal, interest, points, fees, and other charges required of the country involved, is a manageable and prudent percentage of the projected annual export earnings of such country; and

(C)provide that in approving any economic adjustment program the Fund shall take into account the number of countries applying to the Fund for economic adjustment programs and the aggregate effects that such programs will have on international economic growth, world trade, exports and employment of other member countries, and the long-term solvency of banks; and

(2)except as provided in subsection (c) of this section, the United States Executive Director of the Fund shall oppose and vote against providing assistance from the Fund for any economic adjustment program for a country in which the annual external debt service exceeds 85 per centum of the annual export earnings of such country, unless the Secretary of the Treasury first determines and provides written documentation to the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives that—

(A)the economic adjustment program converts high interest rate, short-term bank debt into long-term debt at significantly narrower interest rate spreads than the average interest rate spreads prevailing on bank debt reschedulings negotiated between August 1982 and August 1983 for countries receiving assistance from the Fund for economic adjustment programs in order to minimize the burdens of adjustment on the debtor nation, provided that such interest rate spreads are consistent with that nation’s need to obtain adequate external private financing;

(B)the annual external debt service required of the country involved is a manageable and prudent percentage of the projected annual export earnings of such country; and

(C)the economic adjustment program will not have an adverse impact on international economic growth, world trade, exports, and employment of other member countries, and the long-term solvency of banks.

(c)The provisions of subsection (b)(2) shall not apply in any case in which the Secretary of the Treasury first determines and provides written documentation to the Committee on Banking, Housing, and Urban Affairs and the Committee on Foreign Relations of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives that—

(1)an emergency exists in a nation that has applied to the Fund for assistance that requires an immediate short-term loan to avoid disrupting orderly financial markets;

(2)a sudden decrease in export earnings in the country applying to the Fund for assistance has increased the ratio of annual external debt service to annual export earnings, to greater than 85 per centum for a period projected to be no more than one year; or

(3)other extraordinary circumstances exist which warrant waiving the provisions of subsection (b)(2).

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.

§286cc Sustaining economic growth

Summary

Title 22, §286cc

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Change of Name

Citations & Metadata