BANCO CENTRAL DE LA REPUBLICA ARGENTINA

COMMUNICATION "A" 1858 18/07/91

TO FINANCIAL ENTITIES:

Ref.: LIQUIDITY AND SOLVENCY CIRCULAR - LISOL - 1 -
47. Minimum Capital of Financial Entities

We address you to inform you that this Institution has adopted the following resolution:

"1. Establish that, starting in August 1991, financial entities must have integrated by the last day of each month a minimum computable equity equivalent to the higher value resulting from:

1.1. The result of the following expression:

Ai + (Vrani x R)

where

Ai: Immobilized assets.
Vrani: Risk value of non-immobilized assets determined by summing the values obtained after applying the weighting percentages to the concepts included, as indicated in the attached table.
R: Ratio established by the Central Bank. For the period August/December 1991, it will be 3%, a proportion that will increase by half a percentage point semi-annually until reaching 8%.

To this effect, assets -whether immobilized or not- will be calculated based on the monthly averages of daily balances of the month prior to that corresponding to the determination of the requirement, and

1.2. The minimum capitals announced through Communication "B" 4336 for the period between 31.8 and 30.11.91 and those disseminated by Communication "B" 4489 starting from 31.12.91, without prejudice to the observance of what is provided in points 1.3. and 4.2. of Chapter VI of Circular LISOL-1.

2. Establish that for the purposes of the comparison referred to in the previous point, savings and loan societies for housing or other real estate will consider, starting from 31.12.91, the minimum capitals corresponding to financial companies in accordance with Communication "B" 4489.

For the same purposes, credit boxes must consider from 31.12.91, the amount of A 12,243,000,000, while starting from 31.12.92 and 31.12.93 they will take into account the minimum capitals for financial companies in accordance with Communications "B" 4336 and 4489, respectively.

-2-

Savings and loan societies for housing or other real estate and credit boxes that carry out operations in foreign currency must consider, in view of what is provided in Communication "A" 1823, the requirements established for financial companies in the terms of section 1.2. of the previous point.

3. Provide with effect from August 1991 and for the purposes of what is provided in point 1, that for new financial entities authorized to be established, the immobilized assets will have a weighting factor equal to 2 at the start of their operations and during the first complete fiscal year, a value that will decrease by 0.20 in each of the following five complete annual fiscal years, while the result of the expression referred to in section 1.1. will be compared with the minimum capital according to Communication "B" 4489.

4. Substitute, with effect from August 1991, points 3.4. and 8. of Chapter VI of Circular LISOL - 1 (text according to Communication "A" 414) with the following:

"3.4. Capital Contributions
For the purposes of all regulations related to capital, its integration and increase, including those related to ramp-up or restructuring plans, contributions must be made exclusively in cash and/or with national public securities, in australes or in foreign currency. When it comes to national public securities, the contribution must be made with values that have usual quotation in the stock exchanges and markets where they are traded."

8. Non-compliance with the rules on minimum computable equity will give rise to the following consequences:

8.1. Creation of new entities.
Revocation of the authorization to operate if the required minimum computable equity is not integrated within 60 days of its granting.

8.2. Entities in operation.

8.2.1. The Central Bank may appoint a supervisor for the purposes of presenting the relevant adjustment or, where applicable, restructuring plan, in accordance with the terms of Law 22.529 and its regulatory provisions.

8.2.2. Limitation on access to rediscount for illiquidity in accordance with the provisions of point 1.3.4. of Chapter IV of Circular REMON-1 (text according to Communication "A" 126).

8.2.3. Maintenance of the ratio for deposits and other obligations through financial intermediation -in national and foreign currency- with respect to computable equity, at the level that, as a monthly average of daily balances, is recorded during the month in which the non-compliance occurs.

B.C.R.A. COMMUNICATION "A" 1858 18/07/91

Subsequent departures from this ratio -calculated based on monthly averages- will be subject to the charge provided for in point 3.2.1.1. of Chapter V of Circular LISOL-1 (text according to Communication "A" 414).

8.2.4. Exclusion from the list of entities authorized to participate in foreign exchange and open market operations directly with the Central Bank in accordance with the provisions of Communication "A" 1759.

8.2.5. The impediments provided for in point 3.1. of Chapter V of Circular LISOL-1 (text according to Communication "A" 414).

The continuity of the measures provided for in points 8.2.2. to 8.2.5. will be subject to what is resolved regarding the plan referred to in point 8.2.1."

6. Repeal, with effect from 1.8.91, the following provisions: points 1.1. of Chapter I, 1.1. and 1.3. of Chapter III and 1.1., 2. and 3.4.1. of Chapter VI of Circular LISOL-1 (Communication "A" 414 and complements)."

We remind you that the provisions disseminated by Communication "A" 1820 and complements related to the limit for the collection of deposits in foreign currency remain in force, whose calculation will be carried out within the debt margin resulting from applying the preceding resolution.

We salute you very attentively.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio José Agustín Uriarte
Technical Manager of Financial Entities
General Deputy Manager

ANNEX

B.C.R.A. TABLE OF WEIGHTING OF THE RISK VALUES OF NON-IMMOBILIZED ASSETS
Annex to
Comm "A"1858

Concept - in % -	Weighting - in % -
1. Liquidity	0
2. Public securities
2.1. national	0
2.2. others	50
3. Loans
3.1. with preferred guarantees
3.1.1. cash, national public securities or guarantee of the National Government	0
3.1.2. mortgages and others	50
3.2. to the public sector
3.2.1. National Government (except companies)	0
3.2.2. others	50
3.3. others	100
4. Other codes for financial intermediation
4.1. with the Central Bank	0
4.2. with Preferred Guarantees
4.2.1. cash, national public securities or guarantee of the National Government	0
4.2.2. mortgages and others	50
4.3. other concepts mentioned in point 3.2. of the procedure rules of the debtor's statement of affairs (monthly accounting information regime)	50
4.4. others	100
5. Assets under financial leasing	50
6. Other non-immobilized assets, except those deducted to determine computable equity	100
7. Guarantees, sureties and other contingent liabilities (*)
7.1. with preferred counter-guarantees	50
7.2. others	100

Assets will be considered net of provisions for uncollectible risks and devaluation and of the accumulated amortizations attributable to them.

(*) These concepts, (codes 711033 and 715033, insofar as they correspond to operations accounted for in accounts 721033 and 725033), will be taken into account to determine the requirement applicable from January 1992, calculated in accordance with what is established in point 1.1., "in fine", of the resolution.