Clinton Readies Global Financial Plan

As finance officials from around the world prepared for an urgent series of meetings in Washington, the Clinton administration on Friday readied a series of far-reaching proposals for the world financial system, including a possible line of credit to rescue emerging nations from economic disaster.

“We’ve got to be aware that this thing is changing every day,” President Clinton said of the global crisis. He appealed for “aggressive action” to stabilize the world financial system, reassure investors and tackle problems inside the affected countries.

In particular, Clinton suggested that a “new mechanism” be created within the much-criticized International Monetary Fund to help limit turmoil in the beleaguered emerging nations. Officials later explained that such an approach might in effect mean a new line of credit for countries under financial siege.

Clinton also proposed an expanded crisis mission for the World Bank and other international lenders, which would develop the ability to provide funds “quickly” to developing nations when financial emergencies strike.

And the president repeated his administration’s call for Congress to approve $18 billion in funding for the IMF, which has been financially drained by bailout expenses in Asia and Russia.

“I have been asking for this for nearly a year now,” Clinton told reporters on the South Lawn of the White House before departing on a trip to Cleveland. “The crisis overseas has continued to intensify. This is inexcusable.”

The latest White House statements come as Washington plays host to an invasion of financial officials from all over the world. The Group of Seven leading industrial nations, the IMF and World Bank all have major meetings planned in the coming days. For all the debate, however, few anticipate a quick-and-easy solution to the financial crisis that has spread from Asia to Russia and Eastern Europe and now menaces Latin America.

One step expected any day, however, is IMF action to help prop up Brazil with an infusion of $25 billion to $30 billion. U.S. Treasury Secretary Robert Rubin repeated his support Friday for aid to Brazil, where the currency is under pressure and U.S companies have more than $35 billion in investments.

Brazil’s central bank president, Gustavo Franco, said the government is poised to sharply cut spending to narrow a budget deficit in return for IMF aid. He vowed not to restrict capital outflows or devalue the currency.

U.S. officials are quietly pursuing plans to help Asian nations restructure corporate debt. The U.S. agenda also includes proposals for a larger private-sector role in financing bailouts, fuller disclosure of financial conditions within developing nations and ways to encourage U.S. exporters to keep up business in some of the beleaguered regions.

Rubin elaborated slightly Friday on the president’s proposals for a new emergency mechanism that would be placed under IMF control. Under the concept now being debated, such an approach would not come with a specific price tag, but would enable the IMF to provide as much money “as situations warranted,” he said.

“The idea was to try to get ahead of the contagion and to provide what in effect you might think of as almost a line of credit in a way that countries could call on when they need it,” the Treasury secretary told reporters at a news conference. “This mechanism . . . hopefully will be put in place relatively quickly and help us deal with the current crisis.”

The proposals will be at the center of discussions today among finance officials and central bank presidents from the G-7, made up of the United States, Japan, Germany, France, Britain, Italy and Canada. The U.S. plan will be the topic of further discussion at the annual meetings of the 182-nation IMF and World Bank, scheduled to begin Sunday.

* JOBS SLOWDOWN

Unemployment in the nation rose slightly in September. A1