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Countries will be allowed to go bankrupt 9/29/02 Gordon Brown has announced a dramatic new approach to resolve the issue of countries drowning in debt. The International Monetary Fund has been ordered to create a process by which nations with unmanageable debt can declare bankruptcy. Creditors can then be forced to negotiate more lenient repayment terms. The order comes from the IMF's policy-setting committee of finance ministers. Finance leaders have been looking for a new approach since the Asian currency crisis of 1997-98 pushed 40% of the global economy into recession. Mr Brown made the announcement along with the IMF's managing director, Horst Koehler. It is likely to be the biggest achievement of this year's annual meetings of the IMF and World Bank. The bankruptcy proposal faces stiff opposition from large banks in the US and other wealthy countries that make loans to developing countries. US Treasury Secretary Paul O'Neill appealed to the Institute of International Finance, which represents the world's biggest banks, to help policy-makers come up with an acceptable approach to national bankruptcies. "Everyone of you in this room must engage in this effort - we owe that to the people who have suffered from the chaos of the current system," Mr O'Neill said in prepared remarks.
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