You can do loopbacks at the ATM switch to test out your problem. But first how high is this latency and what is the distance between the routers? Are you running a UBR, ABR or CBR circuit? One problem might be the config on the router and you might have set the bandwidth to high. Try scaling it back by a 1/4, for example, if you have a 4Mbit circuit configure the router to be 3Mbit and see if this fixes your problem.
Jason Smith
www.smif101.com