PFIAB SESSION ON INTERNATIONAL FINANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R000601440038-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: January 4, 2017
• Document Release Date: April 15, 2008
• Sequence Number: 38
• Publication Date: November 30, 1982
• Content Type: MEMO

Approved For Release 2008/04/15: CIA-RDP85M00363R000601440038-0
30 November 1982
AtEti1OR NDUM FOR THE RECORD
SUBJECT: PFIAB Session on International Finance
1. On 29 November
participat in.a I-TIAB hearing on the issue of intelli
gence
or- on international financial problems. Leo Cherne chaired the PFIAB.
Alan Greenspan and Warren Meeker also participated. Two PFIAB staffers
attended the session.
2. Mr. Cherne opened the session indicating that he'is deeply
concerned about the international financial crisis and is in the process
of assessing the appropriate role of intelligence in supporting the US
policy coumlunity on this matter. His opening remarks includeda comment
that he has received very positive consumer feedback on the
the Agency on this issue in the
3. Most of the session involved back and forth discussion of our
views of the financial problem, its severity and likely direction it
will take. We all agreed it was a serious problem which is likely to
remain a key policy issue for at least several years. We also agreed
that it could impact significantly on US economic recovery. Mr. Cherne
strongly believes that a serious risk of international financial crises
exists; Dr. Greenspan was more confident that the worst downside risks
could he avoided but agreed that the outlook is ominous. We did not
disagree with any of these observations.
4. On intelligence issues we discussed a variety of matters.
o The extent of DPI coverage of the finance issue was
discussed at length; we pointed out that our capa-
bilities in this area had run down during the latter
half of the 1910s and that we have spent the Past
nine months building up.
Approved For Release 2008/04/15: CIA-RDP85M00363R000601440038-0
 a4.
Approved For Release 2008/04/15: CIA-RDP85M00363R000601440038-0
SUBJECT: PFIAB Session on Internati-,mal Finance
o The difficulty in hiring first-rate people with
experience in international finance was discussed;
we also focused on the question of private sector
support, pointing out that We aggressively seek
this kind of help but that it is still hard to
get because of banker secrecy.
o We discussed at length the problem in getting good
reporting out of certain embassies and the con-
s
trai.nts imposed on collectors by entrenched
Treasury attaches who are in a position to stone-
wall more aggressive IX) collection.
o Mr. Cherne ra's he Agency's analytic
effort on the crisis, asking ..for
our views on now we t oug t t e Agency performed.
Leo pointed out that he is especially concerned
about the potential political fallout from)
efforts to deal with its economic crisis.
o Some discussion was devoted to the general problem
of knowing when a second tier country--Bolivia, for
example--would find itself in a crisis situation, one
which would spill over to the banking system at large.
5. Mr. Choi-no stumped up his views .in the following way.
.o The Agency is fully sensitive to the nature and extent
of the international financial problem and its potential
implications.
o During the past six months or so it his worked hard
to beef up its effort, adding people, management clout,
and the resources to the program at a rapid pace.
o The catching up process is moving ahead quickly, but
maybe not fast enough to keep pace with the rapidly
deteriorating international financial situation.
6. We disagreed with the last point--it was our stated view that
we have much to do but that we are making important progress. At this
point Leo was given a memorandum mapping out our analytic program and
the direction we intend to go. I believe Leo accepted our view of the
progress we are making.
_ Approved For Release 2008/04/15: CIA-RDP85M00363R000601440038-0
 Approved For Release 2008/04/15: CIA-RDP85M00363R000601440038-0
SUBJECT: PFIAB Session on International Financ_
7. At the conclusion of the session., eo requested that we prepare
a short paper laying out the following issues.
o Our view of the international financial problem.
o What we think CIA's role should be.
o What we need to do the job.
o What will the CIA not do.
We agreed to provide this within the next few weeks. Leo should have it
as an input to an interim report he intends to complete by around the
first of the year.
8. Immediately following the session the same PFIAB team met with
the MIO/Economics.
cc: DCI
DDCI
ExDir
DDI
ADDI
NIO/Econ
Approved For Release 2008/04/15: CIA-RDP85M00363R000601440038-0