International Financial Stability Act

International Financial Stability Act - Amends the Bretton Woods Agreements Act to direct the President to instruct all appropriate Federal officials to encourage countries to formulate economic adjustment programs to deal with their balance of payments difficulties and external debt owed to private banks. Sets forth the goals of such programs.

Directs U.S. representatives to the International Monetary Fund to recommend and work for changes in Fund policies which would: (1) convert short-term high- interest bank debt into long-term lower-interest debt; (2) assure that the total amount of payments required of a country are a manageable percentage of the projected export earnings of such country; and (3) provide that in approving any economic adjustment program the Fund shall consider the number of countries applying to the Fund for such programs and the aggregate effects of such programs. Directs the U.S. Executive Director of the Fund to vote against providing assistance for an economic adjustment program unless the Director determines and provides written documentation that: (1) the program provides for converting short-term high-interest bank debt into long-term lower-interest debt; (2) the total payments required are both a manageable and prudent percentage of the projected export earnings of the country involved; and (3) the program will not have an adverse impact on international economic growth, world trade, exports and employment of other member countries, and the long term solvency of banks. Permits the Director to waive such requirements under unusual circumstances. Requires the National Advisory Council on International Monetary and Financial Policies to include in each of its financial reports to Congress copies of documentation prepared by the U.S. Executive Director of the Fund on proposed economic adjustment programs and a statement detailing actions taken to meet the Director's requirements.

Directs the Financial Institutions Examination Council to require a bank to increase its loan loss reserve if the bank has made a loan to a borrower in a foreign country that cannot repay the loan according to its original terms. Exempts from such requirement banks which have made loans that are being restructured according to the provisions of this Act.