Olympia & York's Canary Wharf bankruptcy filing this week in London gives U.S. bankers another reason to think twice before lending abroad.

Few needed convincing. Overseas lending by U.S. banks fell by $2.7 billion last year, to $711.6 billion, according to the Bank for International Settlements. But there had been signs of a pickup toward yearend - and the bankruptcy of the huge development in London's Docklands area may halt the rebound.

Olympia & York Developments Ltd. placed the project under court administration Wednesday. Canary Wharf is more than $2 billion in debt.

U.S. Assets Unaffected

The filing was the latest chapter in the downfall of Olympia, which filed for bankruptcy protection in Canada May 14.

The developer's U.S. real estate assets were unaffected by either bankruptcy filing. But U.S. bankers said Olympia's collapse has long-term effects on their foreign lending and investment.

"The shock is quite dramatic," said John F. McGillicuddy, chairman and chief executive officer of Chemical Banking Corp., in assessing the impact of Olympia & York's troubles. He spoke Thursday at a meeting of the Financial Women's Association of New York.

Randsworth's Effect

One U.S. banker said last year's collapse of Randsworth Acquisitions Ltd., a British realty concern, already had had " a deleterious effect" on pension fund investment in, and bank lending for, real estate overseas.

Citicorp, which has reserved against a $380 million exposure to Olympia, lost $120 million on loans to Randsworth.

Citicorp said its British commercial real estate exposure totals about $500 million. This does not include Canary Wharf, which is considered a North American exposure because the borrower is based in Canada.

In addition to Canary Wharf and Randsworth, Citicorp and Bankers Trust New York Corp. reportedly have exposures to Mountleigh PLC, a British developer placed in receivership last week.

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