TOKYO, JUNE 1 -- BankAmerica Corp. Chairman A.W. Clausen told Japan's finance minister today that loan loss reserves at U.S. banks are at "appropriate levels" and the U.S. banking system remains healthy, finance ministry officials said.
Clausen was referring to moves among some U.S. banks to increase their reserves for covering bad loans to Latin American and other developing countries.
Citicorp, the biggest U.S. banking concern, two weeks ago boosted its reserves by $3 billion, and No. 3 Chase Manhattan Corp. added $1.6 billion to reserves a week later.
Clausen indicated last week that BankAmerica, the second-largest U.S. banking company, won't boost reserves against his company's troubled foreign debt by anything close to the $1 billion needed to match the steps taken by Citicorp and Chase Manhattan.
Bank analysts have said BankAmerica's troubled financial condition would make it difficult for the company to sharply boost its loan loss reserves. BankAmerica lost $855 million over its past two fiscal years and is attempting to turn an operating profit this year by cutting costs and selling assets.
Ministry officials also said Clausen urged Finance Minister Kiichi Miyazawa to hold vigorous discussions on ways of resolving the Third World debt problem at the upcoming economic summit of industrialized nations.
Leaders of the seven major industrial powers -- the United States, Japan, West Germany, Britain, Canada, Italy and France -- are to meet next week in Venice for their annual economic summit meeting.
Clausen, former president of the World Bank, is visiting Japan to confer with government and industry leaders.
In talks with officials of Japanese commercial banks and trading companies this week, he reportedly is planning to ask them to acquire a considerable portion of some $2 billion in new shares BankAmerica plans to offer this year to raise capital.