Rumors of what Citicorp Chairman John Reed was about to say had already roiled stock and bond markets last week as the trim executive stepped up onto a rostrum in Manhattan. Soon the confirmation flashed around the world: the largest U.S. bank (1986 assets: $196.1 billion) had made an almost heretical break with the U.S. financial community's long-standing practices in handling its crushing burden of $62 billion in Third World debt. Reed declared that Citicorp intends to set aside, effective immediately, no less than $3 billion in additional reserves to cover loan losses on its $133 billion portfolio, bringing its total...
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