As a Republican Congressman from upper New York State, Barber B. Conable Jr. was one of the most highly regarded and admired legislators on Capitol Hill. The rave reviews cited his honesty, integrity, brilliance and savoir-faire.

No one, including Conable, ever claimed that he was a great administrator or knew much about banking -- international or otherwise. Now, after his first year as president of the World Bank, many in the international financial community have been saying he was Peter-Principled into the wrong job -- even if there still is no challenge to his notable qualities.

Much of the sniping at Conable, of course, is due to his reorganization of the bank, one that was long overdue but that backfired because of the clumsy way in which it was managed.

Staffers complain about a large number of "sweetheart deals" -- expensive farewells to officials two or three years away from retirement who took the opportunity to quit early, with very substantial lump-sum capital payments.

"Guys who really have done their jobs and who were bestowed with the honor of staying with the bank feel quite aggrieved that they didn't have equal access to the same kind of compensation packages offered to people whom the bank didn't want to keep," says an insider.

But for the moment, at least, Conable is enjoying a psychological lift by virtue of Treasury Secretary James A. Baker III's decision to back a big increase in the bank's capital, just ahead of the World Bank/International Monetary Fund meeting starting Tuesday.

When Conable walks into the meeting tomorrow of the joint IMF/Bank Development Committee, the assembled financial leaders will therefore have to give him credit for achieving a goal that eluded his predecessor, A.W. Clausen.

But the question still remains, even with virtual assurance that there will be some general capital increase, whether Conable and the bank have the imagination to evolve a strategy to deal with the debt problem in some systematic way. Just throwing more money at already overburdened debtors is hardly the answer.

Opinions differ on whether Conable measures up to the expectations that he would seize the opportunity to devise a lead role for the bank in the debt crisis. Baker went out of his way to praise Conable's performance, but many Europeans, who think Conable too anxious to please U.S. Treasury officials, are skeptical. Richard Feinberg, vice president of the Overseas Development Council -- one of the defenders of Conable on the reorganization question -- nonetheless says Conable has failed to lead and be innovative.

Instead, he notes that IMF Managing Director Michel Camdessus provided something of a new force, moving quickly to bring hope to the poverty-stricken African countries with a proposal for more money as well as debt relief.

"If there's any part of the debt problem that ought to be in the bank's purview," says Feinberg, "it ought to be sub-Saharan Africa."

Percy S. Mistry, who was a senior financial adviser at the bank before resigning at midyear to take a teaching post at Oxford, recommended a detailed plan under which the bank would set up a Debt Restructuring Facility, as an intermediary, to buy up a share of Third World debt at a discount, then pass along the benefit of the discount to the borrowers.

"It is imperative to seize the moment, and take actions which the {banking} system can absorb in a gradual manner, instead of running the risk of a sudden shock which may yet crack it," Mistry told Conable. But Conable has rejected Mistry's and similar proposals.

In an interview here last week while visiting the bank, Mistry said he remains convinced that five years after the debt crisis broke out, it's time for the world financial community to say: "Look, this really has to be systemically addressed, which does not necessarily negate the case-by-case concept."

He scoffs at Baker's complaint that winding down or writing down the debt through a World Bank or other government-backed facility would be laying the solution on the taxpayers' backs.

"That's disingenuous," Mistry snorts. "People forget one very important thing: Who do you think has paid the bill when banks take these large levels of provisioning {establishing reserves} against losses? That has effectively meant a couple of billion in lost revenue. The only difference is that Congress hasn't been asked to appropriate the funds... ."

There are plenty of people left in the World Bank who think like Mistry, but they are not now calling the shots. At best, Conable and Baker this week will be floating modest ideas, mostly in the form of refining the "menu of options," including debt-equity swaps, suggested last spring by Baker as alternatives to straightaway bank lending. Meanwhile, Conable will promise to ship new loan money to the Third World.

But throwing big gobs of money at the problem will not, by itself, solve the problem. Neither will debt-equity swaps, at best a drop in the bucket against the $1 trillion debt problem -- up $300 billion since 1982.

A critical need is to reduce the total, and thereby reduce the flow of interest payments from the Third World back to the rich countries. Feinberg calculates that in fiscal 1987 the IMF and the World Bank together sucked $6.4 billion in net financial transfers away from the Third World, most of it going to the IMF.

With global economic growth stalling, and interest rates rising -- propelled by a tighter money policy in the United States -- the Third World debt situation is again approaching a critical juncture. Latin American politicians are under great pressure to halt a decline in the standard of living.

Says an international official willing to be identified only as a "monetary source": "There is sense of growing anger in these larger debtor countries. They see the United States unable to manage its own economy. That forced the Federal Reserve Board to raise interest rates. And that forces higher debt servicing costs on them."

In all probability, one reason for Baker's surprise decision to back a capital increase for the bank, after stalling on the issue for the past several months, was to defuse some of the criticism by Third World countries on the lack of help from the rich nations.

In this fragile and somewhat hostile setting, a new deal must be struck between the major Latin American debtors and the banks. Feinberg argues that the big banks like Citicorp made a strategic miscalculation when they set aside large new loan loss reserves, in the belief that would strengthen their hands in negotiating with their borrowers in the Third World.

Instead, Feinberg believes that Argentina, Brazil and other leading debtors concluded that the big banks can afford to take some sizable losses that would come through writing down a portion of the debt. Brazil suspended interest payments on $68 billion of its bank debt early this year and demands more liberal terms.

What this suggests is that there is desperate need for a framework to permit a new approach to the debt problem. It must involve a willingness on the part of governments and the commercial banks to write down some of the debt.

Mistry's proposal would cut the annual debt servicing cost of the 15 nations in the Baker Plan by $10 billion to $12 billion, he calculates.

Reduction of the sub-Saharan debt burden, as Camdessus laid it out for the approving heads of government at the Venice summit, would come through rewriting loan terms by government as well as private creditors. And while Camdessus has had some difficulty in collecting the extra loan money from those who think that the United States must accept a bigger share of the burden, "he at least addressed the issue," while Conable did not, Feinberg says.

If Camdessus is successful in his effort to erase the highly negative image of the IMF that persists in the Third World, the leadership may return to that agency by default, Feinberg suggests.

"The IMF," said the monetary source, "can begin to throw its weight on the side of the debtors, by bringing {some additional pressure} on the banks." He cites as an example the banks' refusal to help Costa Rica, until their problems with Brazil are settled.

"That's a damned unfortunate attitude for the banks to be taking," he said angrily. "You are going to begin to see the IMF speaking up on these issues, jawboning if it has to. The IMF is seen too much as captives of the banks, and as having bailed out the big banks."