VOLCKER URGES QUICK AID TO DEBTOR NATIONS

  Federal Reserve Board Chairman Paul
  Volcker said that debtor nations have made much progress in
  laying the groundwork for economic growth, but a solution to
  world debt difficulties was endangered by inaction on new
  financing.
      "There is clearly a danger that adequate financing
  arrangements are not being negotiated and put in place in a
  timely way," Volcker told the Senate Banking Committee.
      The borrowing countries need to be able to proceed with
  confidence that the necessary funds will be available to them,
  he said.
      Brazil has the potential for becoming a leading world
  economic power, but it is in a difficult position today,
  Volcker said.
      He said it will take a concerted effort to regularize
  Brazil's external payments.
      "The key prerequisite is clearly in the hands of Brazilian
  authorities," he said.
      Both Brazil and its creditors have a strong incentive to
  work together, Volcker said.
      Regarding trade imbalances, Volcker said that it was
  critically important that markets be kept open by the
  industrial nations.
      In addition, the United States must reduce its budget
  deficit and foreign nations need to provide stimulus to their
  domestic economies, Volcker said.
      "We need time for those actions and the earlier
  depreciation to work their effects," he said.
  

