Circular LISOL 1 - 89. Minimum Capital Requirements

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 2249 21/09/94 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 89.
Minimum Capital Requirements

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

"- Establish that, for the purposes of determining the minimum capital requirement, documentary credits linked to foreign trade operations and other financing granted with attribution to lines of banks abroad that have the guarantee of another local financial entity, shall be included within the concept 'Vrani' referred to in the expression contained in point 1.1 of the provisions made known through Communication 'A' 2136. Consequently, they will be subject to the application of risk weightings attributable to inter-financial operations.

The entity that has provided its guarantee will weight the assumed contingent liability at 100% - or the lower percentage that is usable according to the counter-guarantees received - applying, in addition, the risk indicator attributable to the interest rate agreed upon for the guaranteed operation or the higher one that corresponds, according to the definition of the factor 'Ir' contained in point 1.1 of the cited regulation."

We clarify that the provisions of the preceding resolution will be considered for determining the minimum capital required starting from 30.9.94, for which effect the adopted definition will apply with respect to the monthly average of daily balances of the included financings that are registered since last August.

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio Miguel A. Kiguel
Manager of Standards for Deputy General Manager Financial Entities Area of Economics and Finance