Sanctioning Apartheid - KORA

The rapid rise in US bank Ioahs to South Africa came to an
abrupt halt in mid-3985. Between March and September 1985, US
bank loans to South Africa declined by $757 million In August
1985, Chase Manhaftan quietly told its customers in South Africa
it would not roll over loans. Most US banks which had not
already ended new loans to South Akica quickly followed
Chases' action.
Table 5
US bank loans to South Ahitxi
End Year P m f of South
Afnm's TOM Debt
163
19.4
19.4
13.8
13.1
l2.8
11.8
Sorwe: Federal F Y Institutions Examination Council
The US banks' actions caused a panic in South Africa At
the time, US banks had autstadhg loans of $35 billion, of
which !EL8 b&n had a maturity of one year or Iess. Fated by
the pmp& of massive capital flight, the South A£rian government
m e d in, and in September 1985, it imposed a debt
s t z u v and ~ reimpd exchange controh.
Two "Interim &mngemmtS"-the semnd one expires in
June 1990-were negotiated heen the Swth African govanment
and a 'Tdmid C o w ' of fiAeen intematiod banlcs,
represmfhg some 300 bW. The US representative5 on the
Tedtnird Committee were Citioorp, ManufacAmrs lFhover, and
J. P. Morgan
The exacf tenns of he two interim ammpents are not
known. According to press reports, the Semnd Amaag@md