Circular LISOL 1 - 181. Minimum liquidity requirements. Requirement on remunerated demand deposits

BANCO CENTRAL DE LA REPUBLICA ARGENTINA __________________________________________________________________ COMUNICACION " A " 2663 30/01/98 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 181.
Minimum liquidity requirements. Requirement on remunerated demand deposits

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

• Replace, with effect from 1.2.98, the provisions
  made known through Communication "A" 2618 with the following:
  "Order that regarding remunerated demand deposits -savings accounts, checking accounts, etc.-, in pesos and in foreign currency, they must integrate a minimum liquidity requirement of 80% when the remuneration exceeds by more than 1 point the nominal annual interest rate for deposits in savings accounts resulting from the daily survey of the B.C.R.A. of the second day prior to that corresponding to the imposition."

Likewise, replacement sheets are attached that should be incorporated into the consolidated text of the norms on minimum liquidity requirements.

We salute you very attentively.
BANCO CENTRAL DE THE REPUBLIC OF ARGENTINA Juan Carlos Isi Alfredo A. Besio Deputy Manager of Standards Manager of Standards for for Financial Entities Financial Entities

ANNEX: 4 SHEETS

+------------+---------------------------------------------------+ I I MINIMUM LIQUIDITY REQUIREMENTS I I B.C.R.A. I---------------------------------------------------I Section 3. Integration. I +------------+---------------------------------------------------+ The compliance with the integration of liquidity requirements will be measured based on the monthly average of daily balances registered in the concepts admitted for such effect during the period of calculation of the requirements, dividing the sum of said balances by the total number of days in the period. The days on which no movement is registered must repeat the balance corresponding to the immediate previous business day. On no day of the calculation period of the integration, the sum of the balances of the admitted concepts, registered at the close of each day, may be less than 60% of the total requirement determined for the month immediately preceding that corresponding.
3.1. Admitted concepts.
3.1.1. Passive loan operations for the Central Bank
(for the transacted capitals).
3.1.2. Account "Liquidity Requirements - Com. "A" 2350"
opened at Deutsche Bank, New York, in the name and at the order of the entity.
3.1.3. Bonds of central governments of countries members
of the Organisation for Economic Co-operation and Development (OECD) that have at least one rating "A" or higher granted by any of the international risk rating agencies according to the list contained in point 2.2. of
Section 2. of the norms on Rating of
financial entities (T.O., Communication "A" 2521 and complementary). It must be titles with usual quotation for significant amounts in exchanges or markets abroad. The calculation will be carried out taking into account the value that results for each day of the month based on the daily quotation of the titles. The calculation of this integration will be admitted always that the bonds or certificates representing the investment are kept in custody at Deutsche Bank, New York. +------------+---------------------+------------------+----------+ IVersion: 3a.ICommunication "A" 2663IVigence: 30.1.98 IPage 1 I +------------+---------------------+------------------+----------+

+------------+---------------------------------------------------+ I I MINIMUM LIQUIDITY REQUIREMENTS I I B.C.R.A. I---------------------------------------------------I Section 3. Integration. I +------------+---------------------------------------------------+
3.1.4. Bank Liquidity Letters of the National Government,
in whose issuance conditions it is established that they are backed by an amount equivalent to the issuance deposited in the Bank Central. These titles must be calculated by the amount invested for their acquisition, without taking into account the interest that accrues on their nominal value.
3.1.5. Securities of the country (public and private)
provided that the local entity is the holder of the right to exercise a put option on the securities to a bank abroad that has at least one rating "A" or higher granted by any of the international risk rating agencies according to the list contained in point
2.2. of Section 2. of the norms on
Rating of financial entities (T.O., Communication "A" 2521 and complementary). It must be provided that the exercise of the option can be carried out at any time within the following 90 days. The exercise value of the option will be calculated as integration from the day on which the operation is arranged. The calculation of this integration will be admitted always that:

• the entity agrees with the counterparty that this
  informs Deutsche Bank, New York, about the celebration of the option contract, with adjustment to the notification model of Section 8.
• the original version of the option contract co-
  rresponding to the entity and the relevant securities are kept in custody at Deutsche Bank, New York, or at the custody agents that it designates. +------------+---------------------+------------------+----------+ IVersion: 2a.ICommunication "A" 2663IVigence: 30.1.98 IPage 2 I +------------+---------------------+------------------+----------+

+------------+---------------------------------------------------+ I I MINIMUM LIQUIDITY REQUIREMENTS I I B.C.R.A. I---------------------------------------------------I Section 4. Minimum requirements. I +------------+---------------------------------------------------+ The requirements resulting from applying the following rates must be integrated:
Concept Rates in %

• in checking account in pesos and in
  US dollars 20
• in savings account in pesos and in fo-
  reign currency 20
• usury pupils, special accounts
  for closed circles, "Fund for unemployment for workers in the construction industry" and "Payment of remunerations" 20
• other demand deposits and obligations,
  including with banks and co- rrespondents abroad -except foreign trade obligations-, immobilized balances in pesos, in foreign currency and in securities and unused balances of advances in checking account formalized 20
• fixed-term deposits in pesos, in
  foreign currency and of securities obligations by "acceptances", passive loans of securities and of foreign currency, cautions and stock market loans of securities, other term obligations in pesos and in foreign currency and obliga- tions to term with banks and correspon- dents abroad -except obliga- tions of foreign trade-, obliga- tions negotiable and investments to + +------------+---------------------+------------------+----------+ IVersion: 7a.ICommunication "A" 2663IVigence: 1.2.98 IPage 1 I +------------+---------------------+------------------+----------+

+------------+---------------------------------------------------+ I I MINIMUM LIQUIDITY REQUIREMENTS I I B.C.R.A. I---------------------------------------------------I Section 4. Minimum requirements. I +------------+---------------------------------------------------+ term constant, with option of early cancellation or renewal for a determined term and with retribu- tion variable:

• up to 59 days 20
• from 60 to 89 days 20
• from 90 to 179 days 15
• from 180 to 365 days 10
• more than 365 days 0
• remunerated demand deposits
  -savings accounts, checking accounts, etc.-, in pesos and in foreign currency, when the remuneration exceeds by more than 1 point the rate of nominal annual interest for deposits in savings accounts resulting from the daily survey of the B.C.R.A. of the se- cond day prior to that corresponding to the imposition 80 + +------------+---------------------+------------------+----------+ IVersion: 7a.ICommunication "A" 2663IVigence: 1.2.98 IPage 2 I +------------+---------------------+------------------+----------+