BRAZIL'S GROS TO MEET BANKS ON TRADE LINE ISSUE
  Brazil's central bank governor
  Francisco Gros will meet senior commercial bankers here today
  in a new attempt to defuse the anger generated by the country's
  unilateral suspension of interest payments on 68 billion dlrs
  of foreign commercial bank debt, bankers said.
      Gros will meet representatives of Citibank, the head of
  Brazil's bank advisory committee, and of co-heads Morgan
  Guaranty Trust Co and Lloyds Bank Plc.
      High on the agenda will be banks' complaints about Brazil's
  accompanying freeze on some 15 billion dlrs of short-term trade
  and interbank lines, the bankers said.
      Brazil's several hundred creditor banks worldwide agreed
  last March to extend the credit lines until March 31, 1987, as
  part of a 31 billion dlr financing package.
      Bankers said the looming expiry of this commitment, coupled
  with Brazil's freeze, raised a spate of technical and legal
  questions that the banks want to discuss with Gros.
      They said they face problems because of the freeze
  requirement that any payment due to be made by a Brazilian bank
  under the trade facility must be deposited instead with the
  central bank. This means foreign bankers cannot easily switch
  their credit lines from one borrower to another.
      The requirement to deposit with the central bank has also
  meant Brazilian banks have been able to negotiate lower
  interest-rate spreads, because foreign banks would rather
  accept a reduced margin than see their money deposited with the
  central bank.
      "It's caused a lot of ill-will with the banking community,"
  one banker said.
      Gros is also expected to brief the banks on the results of
  a 10-day tour of Europe and Japan that he and finance minister
  Dilson Funaro have just completed to seek official support for
  Brazil's debt stance.
  

