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Because of the way that international loan agreements are arranged, every one of Mexico's 850 lenders will need to go along with the new repayment plan being worked out if it is to succeed. The refusal of a single bank could jeopardize the en tire package. Said one participant at the meeting: "Our main concern is to keep anyone from trying to pull their money out. We are writing the book on how it's done on this one." As the talks wore on, members were in almost constant tele phone contact with Mexico's Finance Secretary Jesús Silva Herzog. During breaks, the financiers grabbed quick meals at a nearby 24-hour restaurant.
So far, there has been little opposition to Mexico's request to postpone the payment of $10 billion in principle on short-term loans. There is still no agreement, though, on Mexico's request for up to $1 billion to use as a stand-by loan.
World financial agencies are trying to ease some of the pressure. The International Monetary Fund is assembling emergency loans totaling about $4 billion during the next three years. In addition, the Bank for International Settlements in Basel has prepared an emergency credit line of $1.85 billion, with $925 million coming from the U.S. The entire package is expected to be wrapped up by the end of this month.
Mexico's refinancing troubles will undoubtedly result in some abrupt changes in global banking's freewheeling ways. Financiers, who within the past year have already become wary of making too many foreign loans, are now likely to become much more circumspect. Says Hans Wuttke, the executive vice president of the International Finance Corporation, a World Bank subsidiary: "The pace of lending has already slowed down."
Rimmer de Vries, the chief international economist of Morgan Guaranty Trust Co. of New York, maintains that global banking is quickly beginning to change. Says De Vries: "One thing is certain. The game of international lending is over. If it's going to continue, it will have to be carried on by entirely different rules." New and tougher rules can come none too soon.
—By Alexander L. Taylor III. Reported by Jay Branegan/Washington and Frederick Ungeheuer/New York