U.S. banks' embryonic initiatives in Russia were dealt a setback Monday as the government devalued the ruble, halted payments on its debt, and placed a 90-day moratorium on some foreign debt payments.

American banks had a combined $7.68 billion in cross-border and local country exposure in Russia as of March 31, up 19% from $6.47 billion at yearend, according to data from Brown Brothers Harriman and the Federal Financial Institutions Examination Council.

Of the total, $6.74 billion was held by six money-center banks and $857 million by U.S. regionals. BankAmerica had some $528 million and Chase Manhattan Corp. less than $1 billion. Figures from other major U.S. banks were not available.

With the deterioration in Russia's financial situation, U.S. banks face the risk of further losses on their international operations. Since June 1997, currency devaluations and sharp falls in stock markets across Asia have forced U.S. banks to set aside hundreds of millions of dollars in provisions.

Raphael Soifer, a banking analyst with Brown Brothers Harriman & Co., estimated that a restructuring of Russian government debt involving a 35% writedown of the debt would cost the six big money-center banks around $1.5 billion.

However, Mr. Soifer said, any such writedown would be "manageable." He also estimated that investors have already discounted possible losses in Russia, and that U.S. bank share prices are unlikely to suffer even if turmoil deepens.

A spokesman for Chase Manhattan noted that most of its exposure is short-term-less than one year-and most of it is trading-related. He added that only a small portion of it is actually loans.

"We've been operating very cautiously in Russia and will continue to do so," the spokesman said.

Analysts warned that the turmoil in Russia could spill over into Eastern Europe, and the Asian problems-which have struck hardest in Japan, Indonesia, Thailand, and Malaysia-could hit more countries, including China.

"The situation has now turned from a crisis of confidence into a genuine financial crisis," said Juliet Sampson, an emerging-markets analyst at BankAmerica Corp. in London. "There is now a quite high degree of uncertainty with regard to the Russian government's ability or intention to make debt payments."

On Monday, Treasury Secretary Robert E. Rubin said "extraordinary measures" were necessary to stabilize Russia's deteriorating financial markets.

"We believe it is critically important that the Russian authorities move quickly to take actions to restore confidence," he said. Those steps include closer cooperation with the country's creditors and full implementation of economic reform measures recommended by the International Monetary Fund.

Republic New York Corp., which manages two closed-end mutual funds that invest in Russia, said it expects few investors to pull out.

"We have a very stable client base, and the valuations are so cheap now that it doesn't make sense to sell," said William F. Browder, managing director of the company's Hermitage Capital Management Ltd. subsidiary, which manages the Hermitage Fund. He said he expects losses to total less than 1% of its $292 million of assets under management.

The Hermitage Fund is a closed-end fund that allows investors to redeem shares four times a year. They must notify the fund two months before they intend to redeem, Mr. Browder said.

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