Banking companies will move to seize the collateral backing Ecuador's foreign bonds if that country defaults on $93.5 million of interest payments due today, bankers here warned over the weekend.

Bankers and finance officials attending the annual meeting of the International Monetary Fund and World Bank said that a political stalemate in Ecuador is making it increasingly unlikely that the country will be able to meet a final deadline on its bond payments.

"We don't have a detailed idea of what Ecuador plans to do," said Stanley Fischer, first deputy managing director of the IMF. "There is a lot of controversy in the Ecuadorian government."

In a statement Monday, Ecuadorian President Jamil Mahuad said the country would pay half the interest, which is due today.

At the end of August, Ecuador became the first country to default on payment of so-called Brady bonds, securities issued earlier this decade at a steep discount in exchange for bank loans.

The bonds were part of a program devised by then-U.S. Treasury Secretary Nicholas Brady in order to help developing countries work their way out of a decade-long financial crisis.

Nearly $200 billion of bank loans were exchanged for such instruments, which forgave about $60 billion of interest and principal payments.

In Ecuador's case, banks agreed in 1994 to swap 55% of their loans for almost $6 billion of bonds. But bankers and bondholders have come under increasing pressure from the IMF to modify the original contract and accept a further loss as a result of the current Ecuadorian political stalemate.

"No solution is possible without private-sector involvement," said Mr. Fischer on Saturday.

However bankers said any further discount would be unacceptable.

"If markets were to conclude that there was a new phase of official pressure for rescheduling Brady bonds in financial crises, this would surely increase perceived risk of these instruments," the Institute of International Finance warned in a statement this month.

Independent observers like Rudiger Dornbusch, professor of economics at the Massachusetts Institute of Technology, threw their support behind bankers' rejections of the IMF proposals in discussions last weekend. He called on the fund to stay out of the dispute.

"Let the debt sit out there and rot until they figure out how to get their country to run," said Mr. Dornbusch. "This is a market economy, not a football game."

Mr. Dornbusch also speculated that the IMF was unlikely to lay down a hard and fast set of rules for including the private sector in any reorganization of countries in financial crisis.

"Basically, they don't want to spell out commitments they won't be able to keep," Mr. Dornbusch said.

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