Many Indonesian companies have stopped paying loans denominated in foreign currencies, which have become about four times as expensive, in rupiah terms, as they were early last July, before the Indonesian rupiah and other regional currencies declined sharply. On one side of the table Thursday were representatives of 13 Western and Japanese banks, including Citibank, Chase Manhattan Corp., Bank of Tokyo-Mitsubishi Ltd. and Banque Nationale de Paris. On the other was a ''steering committee'' of Indonesian borrowers.
European banks are the most heavily exposed to East Asian countries hit by the financial crisis.
You can confiscate their assets, but it's a long procedure. Mr. Christianto said foreign banks might ultimately have to accept a steep cut in interest payments. Before the financial crisis erupted in July, one indebted tobacco company could only offer to pay 30 cents for every dollar it owed to a consortium of foreign banks, he said. Mr. Christianto said. Officials of the International Monetary Fund, meanwhile, seemed to soften their opposition Thursday to the idea of a currency board for Indonesia.