Business: Turkey, Peru Take Banks to Brink

Debts to the U.S. and Europe are falling due

The nightmare of international finance is that less-developed, non-oil-producing countries will start defaulting on the enormous debts they owe to private banks—$42 billion to U.S. banks alone. Zaïre defaulted last year, but no panic followed, since the amounts were relatively small Now banks face a much worse threat: possible defaults soon by Turkey and Peru Says one prominent East Coast banker: "We are all worried. Were either Turkey or Peru to default, our exposure would make Zaïre's total international debt of $800 million look like peanuts."

In Turkey, politicians for two years or more...

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