Look who's financing the third world; The Money Lenders: Bankers and a World in Turmoil, by Anthony Sampson. New York: The Viking Press. 336 pp. $16.95.

By , Geoffrey Colvin is on the staff at Fortune magazine.

The biblical overtones in the title of Anthony Sampson's new book, ''The Money Lenders, Bankers and a World in Turmoil,'' promise something on the grand scale, and the promise is not broken. Sampson's subject is banking on a level of which you and I can barely conceive - the lending of enormous sums by private banks, mainly in the United States, to foreign governments around the world.

There's nothing new about that, of course; as Sampson rather entertainingly points out, it was just such transactions that put the Italian bankers who invented banking 700 years ago into business. What's new is the series of events that have lately led bankers to extend their credit to nations of ever diminishing creditworthiness and as a result to involve themselves - one suspects not quite willingly - in the political global conflict of developed country vs. developing, of North vs. South.

Fear of numbers and the niceties of interest rates shouldn't scare one from ''The Money Lenders,'' for they rarely rear their troublesome heads in it. Instead Sampson sticks to the large lines of his story, which leads him eventually to the bankers' role in a very large question indeed: how the world's nations will relate to one another in the years ahead.

Recommended: Could you pass a US citizenship test?

The road there is long and fascinating, beginning with the apparent establishment of world banking as we know it in 1290, when Edward I of England started borrowing from the Bardi of Peruzzi, the Florentine bankers, to finance his wars. From that time on, the relations between private financiers and governments - their own or others - have repeatedly proved crucial in world affairs.

Sampson introduces us to three of today's biggest banks and their leaders: Walter Wriston of Citicorp; Tom Clausen, head of BankAmerica until he left to run the World Bank; and David Rockefeller, head of Chase Manhattan until he retired last year.

Beginning in the early '70s these men faced a confounding problem of stark simplicity, which forms the fulcrum of Sampson's story. As the nations of the Middle East doubled and redoubled their wealth by increasing the price of oil, they began placing deposits of staggering size with these and other banks. Of course interest had to be paid on these deposits, so it was necessary to lend them out and earn a return on them.

But with so much money to be lent, bankers were forced to venture into the likes of Zaire and Romania peddling loans, with two main results. First, the banks and many developing countries became delicately interdependent; if a country missed an interest payment the banks could ruin its financial future by declaring it in default, but at the same time they'd be subjecting themselves to a mammoth write-off. The problem is hardly hypothetical, as Poland's recent struggles with its foreign debt have shown. Second, bank loans have now become the main source of aid to developing nations. As Britain's Lord Lever, a former Labour Party Cabinet minister, said, ''It makes the Marshall Plan look like peanuts.''

Thus do bankers find themselves uneasily involved in questions relatively new to them - questions of ''country risk'' and of the balance of economic and political power among regions of the globe. Sampson considers how these questions are likely to be resolved and how they should be, and in so doing he makes an important and evenhanded point. Bankers in general are no more evil or noble than anyone else. Their solutions will be those of people who are about as intelligent, as altruistic, and as flummoxed by world events as the rest of us.

Share this story:

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...