Washington's Financial Fireman

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NEW YORK: U.S. Treasury Secretary Robert Rubin wasn't at the New York headquarters of J.P. Morgan when heavyweight lenders from the U.S., Japan, and Europe agreed to extend endangered loans to debt-riddled South Korea. But it couldn't have happened without him.

TIME Washington Bureau Chief Michel Duffy says that because President Clinton knows how closely a nation's economics and politics are intertwined, the administration is determined to keep Asia's crisis from becoming a kind of pan-Asian governmental meltdown. "The U.S. government is using every weapon in its arsenal to control the panic," says Duffy.

Clinton's point man on Wall Street? Rubin. The ex-Goldman Sachs honcho worked behind the scenes to bring off Tuesday's summit, and helped convince private bankers to give South Korea another month to get its economy in order.

While the New York bankers were relatively easy to convince, Japanese and Korean lenders weren't always cooperative, says Duffy. In the end it took some cajoling, bullying, and one big incentive: Nobody wanted to lose all that money.