Back from the Brink

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Volcker emerged believing that he had a commitment for $1.5 billion, but things quickly unraveled. "It was a game of poker to the end," said one banker later. One player was Karl Otto Pöhl, president of the German Bundesbank, who refused to chip in until Brazil first reached agreement on a $5.9 billion loan from the International Monetary Fund, which oversees world finance. That commitment came last Wednesday. By week's end the central bank chiefs were willing to provide $1.2 billion through the Bank for International Settlements, pending the outcome of talks in New York City's Plaza Hotel this week between the Brazilians and some 50 bankers.

The cash infusions should come as a vast relief to those bankers, who by the way, are being asked to fork over another $4 billion. Brazil's largest private creditor, Citibank, already has $5 billion at risk in Brazil, an enormous sum that is 15% greater than the bank's shareholder equity. But Citibank Chairman Walter Wriston told TIME last month that he remains confident.