1997-05-23 | A 2541Added · Updated
Financial entities must apply new risk weighters to monthly average daily balances from June 1997, replacing the previous table effective July 1, 1997. Entities learning of a rating after May 31, 1997, must use it for the third month following notification. Financings previously weighted below 100% retain that weight if the debtor becomes "with problems" or "deficient compliance." Sureties from foreign entities are excluded if the parent has consolidated supervision, an investment grade rating, and provides an immediate, unrestricted counter-guarantee.
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__________________________________________________________________ COMUNICACION " A " 2541 23/05/97 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 154.
Minimum Capital of Financial Entities. Risk Weighting of Risk Assets
We address you to inform you that this Institution has adopted the following resolution:
"1. Add, as a criterion to be applied, immediately after the table of risk weighting of non-immobilized asset values, the following paragraph:
"Unused balances of formalized current account advances containing clauses that enable the entity to unilaterally and discretely cancel the possibility of using said margins shall not be computed for the determination of the minimum capital requirement."
Establish that the determination of the minimum capital requirement corrected by the factor "k" of the expression referred to in point 1.1 of the resolution disseminated through Communication "A" 2136, linked to the rating assigned to the financial entity by the Superintendence of Financial and Exchange Entities which had been communicated by May 31, 1997, must be carried out with respect to amounts whose integration becomes due from August 31, 1997.
Entities that become aware of said rating after May 31, 1997, shall take it into account for the calculation of the requirement corresponding to the third month following the notification.
Substitute, with effect from July 1, 1997, the table of risk weighting of non-immobilized asset values referred to in Annex I to Communication "A" 2136 (text according to Communication "A" 2453), by the one attached hereto which forms an integral part of this communication."
We clarify that the charge referred to in point 1 of the resolution disseminated by Communication "A" 2453 only proceeds to the extent that the recalculation of the minimum capital requirement applying the risk weighters and indicators required by regulation determines a deficiency in its integration.
Finally, we point out that pursuant to point 3 of the preceding resolution, the new risk weighters will be applied with respect to the monthly average of daily balances of the included items registered from June 1997.
We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Juan Carlos Isi Alfredo A. Besio
Submanager of Standards Manager of Standards for for Financial Entities Financial Entities
ANNEX
| Concept | Weighting - in % - |
|---|---|
| 1. Liquidity | |
| 1.1. Current accounts at the B.C.R.A.; B.N.A. (New York branch) for placements at sight under the regime of Communication "A" 1820; account "Liquidity Requirements - Com. "A" 2350" opened at Deutsche Bank (New York) and payment orders charged to the B.C.R.A. | 0 |
| 1.2. Current accounts, correspondent accounts or at sight, at the head office or controlling bank abroad of the local financial entity or in its branches in other countries and in its subsidiaries, provided they are subject to a consolidated supervision regime and that the head office or controller is located in countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) that have, at minimum, an "A" rating or higher or in other countries whose central banks or equivalent supervisory authority have signed cooperation agreements with the B.C.R.A. in banking supervision matters | 0 |
| 1.3. Cash in vault (in pesos, US dollars, German marks, French francs, Swiss francs, yen and sterling pounds) and in automatic teller machines | 0 |
| 1.4. Gold and other precious metals provided they meet the conditions established in Communication "A" 2290 | 0 |
| 1.5. Other current accounts, correspondent accounts and other at sight accounts in domestic banks, and in foreign banks included in the highest quality investment categories ("investment grade") | 20 |
| 1.6. Others | 100 |
| 2. Public Securities | |
| 2.1. National government | 0 |
| 2.2. Provincial, municipal governments and of the City of Buenos Aires: | |
| 2.2.1. with guarantee of federal tax sharing through the assignment (direct or indirect) of the corresponding rights | 0 |
| 2.2.2. others | 100 |
| 2.3. issued by state-owned companies and societies, except mixed economy or with state participation, of the governments referred to in points 2.1. and 2.2.: | |
| 2.3.1. national government or with its express guarantee | 50 |
| 2.3.2. other governments, whose issuance does not have the express guarantee of the national government | 100 |
| 2.4. Foreign | |
| 2.4.1. bonds of central governments of countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) that have an "A" rating or higher | 0 |
| 2.4.2. bonds issued by agencies or departments of central governments of O.E.C.D. countries that have an "A" rating or higher | 20 |
| 2.4.3. others | 100 |
| 3. Loans | |
| 3.1. To the non-financial private sector | |
| 3.1.1. With preferred guarantees | |
| 3.1.1.1. Cash (in pesos, US dollars, German marks, French francs, Swiss francs, yen and sterling pounds) and gold | 0 |
| 3.1.1.2. Certificates of deposit time deposits issued by the creditor entity itself | |
| a) in pesos or US dollars | 0 |
| b) in the remaining currencies referred to in point 3.1.1.1. or in national public securities, in both cases with a 10% margin | 0 |
| 3.1.1.3. Guarantee of the National Government (only with respect to operations valid until June 30, 1993) | 0 |
| 3.1.1.4. Automatic repayments of export operations corresponding to multilateral and bilateral credit agreements for foreign trade | 0 |
| 3.1.1.5. Provincial guarantee funds, provided these have the special allocation of resources from federal tax sharing | 0 |
| 3.1.1.6. National public securities, with a 10% margin | 0 |
| 3.1.1.7. Mortgage | |
| a) First degree on real estate for owner-occupied housing that is the subject of the encumbrance, when referring to loans for their acquisition or improvement or cancellation of pre-existing loans agreed for that purpose, regarding the credit support that does not exceed 75% of the appraised value of such properties | 50 |
| b) Linked to real estate referred to in point 3.1.1.7. a), on the amount exceeding 75% of the appraised value of such properties | 100 |
| c) First degree on real estate for other uses, regarding the credit support that does not exceed 50% of the appraised value of such properties | 75 |
| d) Linked to real estate referred to in point 3.1.1.7. c), on the amount exceeding 50% of the appraised value of such properties | 100 |
| 3.1.1.8. Pledge | |
| a) Fixed with first-degree registration or with displacement to the entity on motor vehicles, regarding the credit support that does not exceed 75% of the market value of such goods | 50 |
| b) Fixed with first-degree registration or with displacement to the entity on motor vehicles, regarding the amount exceeding 75% of the market value of such goods | 100 |
| 3.1.1.9. "Warrant" on wheat, corn, sunflower, soy and sugar; and on other products in operations that have, in the latter case, prior approval of the Superintendence of Financial and Exchange Entities: | |
| a) Regarding the credit support that does not exceed 90% of the market value of the goods | 50 |
| b) On the amount exceeding 90% of the market value of the goods | 100 |
| 3.1.1.10. Documentary credits used, except deferred payment ones, whose shipping documentation has not yet been delivered to the client | 50 |
| 3.1.1.11. With guarantees granted by reciprocal guarantee societies (Law 24.467), registered in the registry authorized at the B.C.R.A. | 50 |
| 3.1.1.12. Constituted by invoices to consumers receivable, issued by public service companies providing electricity, gas, water, telephone, etc.: | |
| a) Regarding the assistance that does not exceed 80% of the nominal value | 75 |
| b) On the excess | 100 |
| 3.1.1.13. Constituted by credit card coupons: | |
| a) Regarding the assistance that does not exceed 75% of the nominal value | 75 |
| b) On the excess | 100 |
| 3.1.2. Without preferred guarantees | 100 |
| 3.2. To the non-financial public sector | |
| 3.2.1. National Government | 0 |
| 3.2.2. Provincial, municipal governments and of the City of Buenos Aires and their enterprises -whatever the legal nature-, with guarantee of federal tax sharing through the assignment (direct or indirect) of the corresponding rights and that have the pertinent intervention of the Ministry of Economy and Public Works and Services of the Nation | 0 |
| 3.2.3. Enterprises of the national, provincial, municipal governments and of the City of Buenos Aires, except operations included in point 3.2.2. | |
| 3.2.3.1. Constituted as mixed economy societies or with state participation, with the express guarantee of the national government | 0 |
| 3.2.3.2. Of the national government, not constituted as mixed economy societies or with state participation | 50 |
| 3.2.3.3. Others | 100 |
| 3.3. To the financial sector | |
| 3.3.1. Banco de la Nación Argentina | 0 |
| 3.3.2. Official banks of provinces, municipalities and of the Government of the City of Buenos Aires, with guarantee (direct or indirect) of federal tax sharing | 0 |
| 3.3.3. Others | 100 |
| 3.4. With guarantee of foreign banks | |
| 3.4.1. Head office or controlling bank, of the local financial entity or of its branches in other countries and of its subsidiaries, provided they are subject to a consolidated supervision regime and that the head office or controller is located in countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) that have, at minimum, an "A" rating or higher or in other countries whose central banks or equivalent supervisory authority have signed cooperation agreements with the B.C.R.A. in banking supervision matters | 0 |
| 3.4.2. Other foreign banks included in the highest quality investment categories ("investment grade") | 20 |
| 3.5. To foreign banks | |
| 3.5.1. To the head office or controlling bank, of the local financial entity or to its branches in other countries and to its subsidiaries, provided they are subject to a consolidated supervision regime and that the head office or controller is located in countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) that have, at minimum, an "A" rating or higher or in other countries whose central banks or equivalent supervisory authority have signed cooperation agreements with the B.C.R.A. in banking supervision matters | 0 |
| 3.5.2. Others included in the highest quality investment categories ("investment grade") | 20 |
| 3.6. Others | 100 |
| 4. Other Credits by Financial Intermediation | |
| 4.1. For operations with the Central Bank | 0 |
| 4.2. Debentures and other debt securities purchased | |
| 4.2.1. Own issuances | 0 |
| 4.2.2. Issued by mixed economy societies or with state participation, of the national, provincial, municipal governments and of the City of Buenos Aires, whose issuance has the express guarantee of the national government | 0 |
| 4.2.3. Others | 100 |
| 4.3. Financial leasing rentals accrued receivable | |
| 4.3.1. Linked to goods included in points 5.1. and 5.3. | 50 |
| 4.3.2. Linked to other goods | 75 |
| 4.4. Forward purchases of national public securities and foreign currency, linked or not with passive swaps, and their corresponding premiums to accrue | |
| 4.4.1. With a coverage margin of 20% or more in the traded species or in fixed-term deposit certificates in the intervening entity itself | 0 |
| 4.4.2. With counterparties included in the highest quality investment categories ("investment grade") | 0 |
| 4.4.3. Others | 20 |
| 4.5. Debtors from forward sales of national public securities and foreign currency, linked or not with active swaps | |
| 4.5.1. With a coverage margin of 20% or more in the traded species or in fixed-term deposit certificates in the intervening entity itself | 0 |
| 4.5.2. With counterparties included in the highest quality investment categories ("investment grade") | 0 |
| 4.5.3. Others | 20 |
| 4.6. Spot purchases for settlement of securities and foreign currency, and their corresponding premiums to accrue | 0 |
| 4.7. Debtors from spot sales for settlement of foreign currency and securities | 0 |
| 4.8. Forward purchases of private securities and others, except national public ones, linked or not with passive swaps, and their corresponding premiums to accrue | |
| 4.8.1. With counterparties included in the highest quality investment categories ("investment grade") | 0 |
| 4.8.2. Others | 50 |
| 4.9. Debtors from forward sales of private securities and others, except national public ones, linked or not with active swaps | |
| 4.9.1. With counterparties included in the highest quality investment categories ("investment grade") | 0 |
| 4.9.2. Others | 50 |
| 4.10. Overdue spot purchases for settlement and forward purchases of national public securities, private securities and others and foreign currency, linked or not with swaps, in which the financial entity has already effected its performance and is pending receipt of the agreed counterparty, whatever the accounting registration mode employed | |
| 4.10.1. With counterparties included in the highest quality investment categories ("investment grade") | 20 |
| 4.10.2. Others | 100 |
| 4.11. Other forward purchases, their corresponding premiums to accrue and debtors from other forward sales | |
| 4.11.1. With counterparties included in the highest quality investment categories ("investment grade") | 0 |
| 4.11.2. Others | 50 |
| 4.12. Collateral and stock exchange swaps | |
| 4.12.1. On national public securities | |
| 4.12.1.1. With a coverage margin of 20% or more in the traded species | 0 |
| 4.12.1.2. With other coverage margins | 20 |
| 4.12.2. With counterparties included in the highest quality investment categories ("investment grade") | 0 |
| 4.12.3. Others | 50 |
| 4.13. With foreign banks | |
| 4.13.1. Head office or controlling bank, of the local financial entity or with its branches in other countries and with its subsidiaries, provided they are subject to a consolidated supervision regime and that the head office or controller is located in countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) that have, at minimum, an "A" rating or higher or in other countries whose central banks or equivalent supervisory authority have signed cooperation agreements with the B.C.R.A. in banking supervision matters | 0 |
| 4.13.2. Others included in the highest quality investment categories ("investment grade") | 20 |
| 4.14. With the financial sector | |
| 4.14.1. Banco de la Nación Argentina | 0 |
| 4.14.2. Official banks of provinces, municipalities and of the Government of the City of Buenos Aires, with guarantee (direct or indirect) of federal tax sharing | 0 |
| 4.14.3. Others | 100 |
| 4.15. With guarantee of foreign banks | |
| 4.15.1. Head office or controlling bank, of the local financial entity or of its branches in other countries and of its subsidiaries, provided they are subject to a consolidated supervision regime and that the head office or controller is located in countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) that have, at minimum, an "A" rating or higher or in other countries whose central banks or equivalent supervisory authority have signed cooperation agreements with the B.C.R.A. in banking supervision matters | 0 |
| 4.15.2. Other foreign banks included in the highest quality investment categories ("investment grade") | 20 |
| 4.16. Others, except those having the preferred or assimilable guarantees detailed in point 3.1.1., in which case they will observe the weighter established for each case | 100 |
| 5. Goods in Financial Leasing | |
| 5.1. Real estate for tenant's housing | |
| 5.1.1. Applicable on 75% of the value of the goods | 50 |
| 5.1.2. On the rest of the financing | 100 |
| 5.2. Other real estate | |
| 5.2.1. Applicable on 50% of the value of the goods | 75 |
| 5.2.2. On the rest of the financing | 100 |
| 5.3. Motor vehicles | 50 |
| 5.3.1. Applicable on 75% of the value of the goods | 50 |
| 5.3.2. On the rest of the financing | 100 |
| 5.4. Other goods | 100 |
| 6. Other Non-Immobilized Assets, Except Those Deductible for Determining Computable Patrimonial Responsibility | |
| 6.1. Participations in the capital of domestic and foreign companies | 100 |
| 6.2. Shares of common investment funds whose assets are constituted exclusively by: | |
| 6.2.1. National public securities | 0 |
| 6.2.2. Bonds issued by central governments referred to in section 2.4.1. | 0 |
| 6.2.3. Bonds issued by agencies or departments of central governments referred to in section 2.4.2. | 20 |
| 6.2.4. Others | 100 |
| 6.3. Others | 100 |
| 7. Guarantees, Sureties and Other Contingent Liabilities | |
| 7.1. Used documentary credits of deferred payment whose shipping documentation has not yet been delivered to the client | 50 |
| 7.2. For compliance with contractual obligations and/or maintenance of offers | 100 |
| 7.3. To the non-financial public sector | |
| 7.3.1. National Government | 0 |
| 7.3.2. Provincial, municipal governments and of the City of Buenos Aires and their enterprises -whatever the legal nature-, with guarantee of federal tax sharing through the assignment (direct or indirect) of the corresponding rights and that have the pertinent intervention of the Ministry of Economy and Public Works and Services of the Nation | 0 |
| 7.3.3. Enterprises of the national, provincial, municipal governments and of the City of Buenos Aires, except operations included in point 7.3.2. | |
| 7.3.3.1. Constituted as mixed economy societies or with state participation, with the express guarantee of the national government | 0 |
| 7.3.3.2. Of the national government, not constituted as mixed economy societies and with state participation | 50 |
| 7.3.3.3. Others | 100 |
| 7.3.4. Others | 100 |
| 7.4. Differences between market and exercise prices when resulting in favor of the entity, from rights emerging from purchase and sale option contracts | |
| 7.4.1. Covered with guarantee or replacement margins, in institutionalized markets of the country or of countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) that have, at minimum, an "A" rating or higher | 0 |
| 7.4.2. With Banco de la Nación Argentina | 0 |
| 7.4.3. Others | 100 |
| 7.5. Others | 100 |
- Criteria for the application of risk weighters: a) The concepts indicated in points 1. to 7. will be computed based on the monthly averages of daily balances of the month preceding that corresponding to the determination of the requirement (capital, interest, premiums and quotation differences, as applicable, net of provisions for uncollectibility and devaluation risks and of accumulated amortizations attributable to them, without deducting provisions for uncollectibility risk on the portfolio classified in "normal situation" or "normal compliance").
b) When the market value of the received guarantees and counter-guarantees does not cover the amount of assistance granted, the coverage defect will be weighted at 100%.
c) Financings that, at origin, were weighted with values lower than 100%, will remain subject to that weighter from the moment the debtor is classified as "with problems" or "deficient compliance" or in some of the following lower quality categories.
d) In the case where the operations included in point 7. have counter-guarantees, in place of the weighting values established in points 7.1. to 7.5., those mentioned in point 3 will be used when, according to the guarantee received, they are lower than those. The operations included in points 7.1. to 7.5. include codes 711009, 711033, 715009 and 715033 -as far as they correspond to operations accounted for in accounts 721003, 721033, 725001 and 725033-, 711010, 711034, 711035, 711038, 711045, 715003, 715007, 715010, 715034, 715035, 715038 and 715045.
Unused balances of formalized current account advances containing clauses that enable the entity to unilaterally and discretely cancel the possibility of using said margins shall not be computed for the determination of the minimum capital requirement.
e) Sureties, guarantees and other liabilities and financings granted by local branches and subsidiaries of foreign financial entities, on behalf and order of their head office or branches in other countries and/or the controlling entity are excluded from computation for the determination of the minimum capital requirement, provided the following requirements are observed:
The regulations of the country where the head office and/or controlling entity is located, defined the latter according to the provisions in force in that jurisdiction, encompass supervision on a consolidated basis of local affiliates or subsidiaries,
The entity has an "investment grade" rating,
There is a counter-guarantee extended by the head office, by branches in other countries and/or by the foreign controlling entity regarding the guarantee granted locally and its effectiveness operates unrestricted upon simple request of the local affiliate or subsidiary and in an immediate manner to its eventual execution by the beneficiary, and
in the case of financings, these must be attended to by local subsidiaries or affiliates only with funds originating from lines assigned to them by the aforementioned foreign intermediaries.
f) Holdings of public securities derived from reverse repos with the Central Bank are weighted at 0%.
g) In the case where the same operation presents attributes subject to different risk weights, the asset will be weighted by the lowest of them.
h) When a specific rating is required for an entity or asset from abroad, it refers to the one granted by any international agency included in the list of point 2.2. ii) of Annex II to Communication "A" 2521.
i) Financial entities that acquire debt securities issued by public banks must weight them using the percentages applicable to interfinancial operations (point 4.14.).
j) The weight referred to in point 3.1.1.11. will only be used to the extent that the interest rates applicable to such operations do not exceed those fixed for the first bracket of the Risk Indicators Table contained in Communication "A" 2417.
k) In holdings of mixed investment funds, the highest individual weight corresponding to the assets that make it up will be applied.
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