Leverage Ratio. Minimum Capital of Financial Institutions. Large Exposures to Credit Risk. Consolidated Supervision. Adjustments.

We address you to inform you that this Institution adopted the resolution that, in its pertinent part, provides:

“- Establish that financial institutions qualified by the Central Bank of the Argentine Republic as domestic systemically important banks (D-SIB) and the branches or subsidiaries of foreign banks qualified as global systemically important banks (G-SIB) must comply with the ordered texts on Leverage Ratio, Large Exposures to Credit Risk and Minimum Capital of Financial Institutions, on a quarterly consolidated basis that includes their holding company –not a financial institution–, under the terms provided in point 5.2.2. of the ordered text on Consolidated Supervision.”

Likewise, we send you the pages that, in replacement of those previously provided, must be incorporated into the ordered texts on Leverage Ratio, Minimum Capital of Financial Institutions, Large Exposures to Credit Risk and Consolidated Supervision. It is recalled that on the page of this Institution www.bcra.gob.ar, by accessing “Secciones – Sistema Financiero – MARCO LEGAL Y NORMATIVO – Ordenamientos y resúmenes – Textos ordenados de normativa general”, the modifications made will be found with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Darío C. Stefanelli
Principal Manager of Issuance and
Regulatory Applications
Marina Ongaro
Deputy General Manager of Financial Regulation

ANNEX

B.C.R.A. LEVERAGE RATIO
Section 3. Bases of observance.

3.1. Individual basis.

Financial institutions (including their subsidiaries in the country and abroad) shall observe these rules on an individual basis.

3.2. Consolidated basis.

Without prejudice to compliance on an individual basis, controlling financial institutions subject to consolidated supervision shall observe these rules on a quarterly consolidated basis.

Financial institutions qualified by the BCRA as domestic systemically important (D-SIB) and the branches or subsidiaries of foreign banks qualified as global systemically important (G-SIB) whose controlling company is a “holding company” –not a financial institution– must comply with these rules on a quarterly consolidated basis, which includes that “holding company” and all subsidiaries of that “holding company” or of the financial institution under the terms provided in point 5.2.2. of the TO on Consolidated Supervision.

3.3. Treatment of investments in financial institutions, insurance companies and commercial companies.

In the case of financial institutions and other companies not subject to consolidation for the calculation of minimum capital, only the book value of the investment must be computed –that is, the assets of the investee must not be computed–. The exposure measure may exclude the investment in financial institutions and companies providing services complementary to financial activity, not subject to consolidated supervision, and in insurance companies when said investment is deducted from tier one capital (PNb), as described in point 2.1.4.

B.C.R.A. ORIGIN OF THE PROVISIONS CONTAINED IN THE ORDERED TEXT ON LEVERAGE RATIO

ORDERED TEXT	ORIGINATING RULE	OBSERVATIONS
Sec.	Point	Par.	Com.	Annex	Point	Par.
1.	1.1.		“A” 6431
	1.2.		“A” 6431
	1.3.		“A” 6431
2.	2.1.		“A” 6431
	2.2.1.		“A” 6431				According to Com. “A” 7443.
	2.2.2.		“A” 6431
	2.2.3.		"A" 6431				According to Com. "A" 8109.
	2.2.4.		"A" 6431
3.	3.1.		"A" 6431
	3.2.		"A" 6431				According to Com. "A" 8499.
	3.3.		"A" 6431

B.C.R.A. MINIMUM CAPITAL OF FINANCIAL INSTITUTIONS
Section 9. Bases for compliance with the rules.

9.1. Individual basis.

Financial institutions (including their domestic and foreign subsidiaries) shall comply with these rules on an individual basis.

9.2. Consolidated basis.

Without prejudice to individual compliance, controlling financial institutions subject to consolidated supervision shall comply with these rules on a monthly consolidated basis and, additionally and independently, on a quarterly basis.

For the purposes of compliance with the rules on minimum capital for market risk, for each level of subconsolidation, sold and purchased positions in the same instrument (currency, share or bond) shall be consolidated and reported on a net basis, regardless of the branch or subsidiary in which they are recorded. This implies consolidating the total positions of subsidiaries in which the entity does not have 100% ownership. Consequently, the offsetting rules for this risk shall be applied on a consolidated or subconsolidated basis, as applicable. However, where there are obstacles to the rapid repatriation of profits from a foreign branch or subsidiary or legal or administrative difficulties for the adequate management of risks on a consolidated basis, individual positions shall be included in the calculation without netting them against other positions in the rest of the group.

Likewise, financial institutions qualified by the BCRA as D-SIB and branches or subsidiaries of foreign banks qualified as G-SIB whose controlling company is a "holding company" – not a financial institution – shall comply with these rules on a consolidated basis – quarterly –, comprising that "holding company" and all subsidiaries of that "holding company" or of the financial institution under the terms set forth in point 5.2.2. of the Consolidated Supervision TO.

MINIMUM CAPITAL OF FINANCIAL INSTITUTIONS


CONSOLIDATED TEXT			ORIGINAL RULE				OBSERVATIONS
Section	Point	Paragraph	Com.	Cap./ Annex	Point	Paragraph
8.	8.4.1.19.		"A" 414 LISOL-1	VI	3.2.		According to Com. "A" 4172, 4539, 4665 and 5369 (Annex I).
			"A" 1215				Specifications of the items of holdings in financial institutions not deductible to determine the computable equity. According to Com. "A" 4172.
	8.4.2.		"A" 5369	I
	8.4.2.1.		"A" 5369	I			According to Com. "A" 5831.
	8.4.2.2.		"A" 5369	I			According to Com. "A" 5580 and 5831.
	8.4.2.3.		"A" 5831
	8.5.		"A" 5369	I			According to Com. "A" 5867 and 8463.
	8.6.		"A" 414 LISOL-1	VI	3.4.		According to Com. "A" 1858, 4172, 4631, 4652, 5369 (Annex I), 6260, 6304 and "B" 9186.
	8.7.		"A" 4652		2.		According to Com. "A" 6327.
9.	9.1.		"A" 2227	sole	5.2.1.	last	According to Com. "A" 2649 and 4172.
	9.2.		"A" 2227	sole	5.1.1., 5.1.7. and 5.2.2.		According to Com. "A" 2461, 2649, 4172, 5272, 5369 and 5867.
			last "A" 6723		1.		According to Com. "A" 7393 and 8499.
10.	10.1.		"A" 6004	sole			According to Com. "A" 6343.
	10.2.		"A" 6004	sole			According to Com. "A" 6343.
	10.3.		"A" 6004	sole			According to Com. "A" 6343.
11.	11.1.		"A" 3985				According to Com. "A" 4172.
	11.2.		"A" 3985				According to Com. "A" 4172.
	11.3.		"A" 5369		8.		According to Com. "A" 5580.
	11.4.		"A" 6938		12.		According to Com. "A" 7007 and 7928.
	11.5.		"A" 7018		5.		According to Com. "A" 8121 and 8418.
	11.6.		"A" 7545		1.
	11.7.		"A" 8467		4.
12.	12.1.	1°	“A” 7470		2.		According to Com. “A” 7524 and 8028.
		2°	“A” 7470		3.		According to Com. “A” 7524 and 8028.
	12.2.		“A” 8067				According to Com. “A” 8383.
	12.3.		“A” 8364		5.

B.C.R.A. LARGE CREDIT RISK EXPOSURES
Section 6. Basis of compliance with the rules.

6.1. Individual basis.

Financial institutions (including their branches in the country and abroad) shall observe these rules on an individual basis.

6.2. Consolidated basis.

Without prejudice to compliance on an individual basis, controlling financial institutions subject to consolidated supervision shall observe these rules on a monthly consolidated basis and, additionally and independently, on a quarterly basis.

Compliance at the consolidated level implies that the controlling entity must consider all exposures to individual counterparties that belong to the same group of connected counterparties – in accordance with the definition provided in point 1.2.1. – and compare the aggregate amount of those exposures with the group's tier one capital.

Likewise, financial institutions qualified by the BCRA as domestically systemically important (D-SIB) and branches or subsidiaries of foreign banks qualified as globally systemically important (G-SIB) whose controlling company is a “holding company” – not a financial institution – must comply with these rules on a consolidated basis – quarterly –, which includes that “holding company” and all subsidiaries of that “holding company” or of the financial institution under the terms provided in point 5.2.2. of the Consolidated Supervision TO.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

LARGE CREDIT RISK EXPOSURES

CONSOLIDATED TEXT SOURCE RULE OBSERVATIONS Sect. Point Par. Com. Annex Chap. Sect. Point Par.
2.
2.5.2.2. “A” 2140 II 3.4. According to Com. “A” 5472,
5496, 5671, 5740, 6599 and 6978. Includes explana- tory clarification.
2.5.3.1. “A” 2140 II 2.1. According to Com. “A” 5472 and
6599.
2.5.3.2. i) “A” 2140 II 2.2. 1° According to Com. “A” 5472 and
6599. ii), 1° “A” 2140 II 2.2. 1° According to Com. “A” 5472 and 6599. ii), 2° “A” 2252 3. 1°
2.6. “A” 2140 I 5. According to Com. “A” 5472 and
6599.
2.6.1. “A” 2140 I 5. According to Com. “A” 5472,
5671 and 6599.
2.6.2. “A” 3901 II 1.1. According to Com. “A” 6599.
2.7. “A” 5193 According to Com. “A” 5472.
2.8.1. “A” 6599 According to Com. “A” 6620.
2.8.2. “A” 6599
3.
3.1. “A” 6599 According to Com. “A” 6620.
3.2. “A” 6599 According to Com. “A” 8109,
8171 and 8467.
3.3. “A” 6599 According to Com. “A” 6639 and
8109. Includes regulatory
interpretation.
3.4. “A” 6599
4.
4.1. “A” 6599
4.2. “A” 6599
4.3. “A” 6599
4.4. "A" 6599
5.
5.1. "A" 49
OPRAC-1
I 4.4.1. Includes clarifications interpretative. According to Com. "A" 5472.
5.1.3. "A" 49
OPRAC-1
I 4.4.1. Includes clarifications interpretative. According to Com. "A" 5472 and 7404.
5.2. "A" 49
OPRAC-1
I 4.4.2.
5.3.1. "A" 2573 1. According to Com. "A" 3051
(Annex, point 1.4.1.).
5.3.2. "A" 5472
6.
6.1. "A" 2649 1. According to Com. "A" 6599.
6.2. 1° "A" 2227 sole 5.1.2.,
5.1.3.,
5.2.1. and
5.2.2.
According to Com. "A" 2649
(point 1.) and 6599.
2° "A" 6599 last "A" 6723 1. According to Com. "A" 7393 and 8499.

B.C.R.A. CONSOLIDATED SUPERVISION
Section 5. Compliance with standards.

5.2.1.8. Ratio for fixed assets and other concepts.

5.2.1.9. Liquidity coverage ratio –when dealing with financial institutions included in those standards– in accordance with the scope established in point 8.2. of the TO on Liquidity Coverage Ratio.

5.2.2. Quarterly consolidated basis.

Without prejudice to compliance on an individual basis, and additionally and independently of compliance on a monthly consolidated basis, controlling financial institutions subject to consolidated supervision shall observe on a quarterly consolidated basis the following standards:

5.2.2.1. Minimum capital.

5.2.2.2. Classification of debtors and minimum provisions for bad debt risk.

5.2.2.3. Financing to the non-financial public sector.

5.2.2.4. Maximum limit for holding interests in companies that do not provide complementary services to financial activity.

5.2.2.5. Ratio for fixed assets and other concepts.

5.2.2.6. Net stable funding ratio –when dealing with financial institutions included– in accordance with the provisions of point 6.2. of the TO on Net Stable Funding Ratio.

5.2.2.7. Large exposures to credit risk.

5.2.2.8. Leverage ratio.

Financial institutions qualified by the BCRA as locally systemically important (D-SIB) and branches or subsidiaries of foreign banks qualified as globally systemically important (G-SIB) whose controlling company is a "holding company" –not a financial institution– shall observe the standards referred to in points 5.2.1.9., 5.2.2.1., 5.2.2.6., 5.2.2.7. and 5.2.2.8., on a consolidated basis, comprising that "holding company" and all subsidiaries of that "holding company" or of the financial institution, excluding insurance companies and any other subsidiary of the group as long as it does not perform activities of a financial nature.

For these purposes, activity of a financial nature includes the activities that financial institutions may carry out, those provided for in point 2.2. of the TO on Complementary Services to Financial Activity and Permitted Activities, as well as others that the SEFYC considers to be auxiliary to the activity of financial institutions, excluding insurance companies.

5.2.3. Compliance with the TO on Prevention of Money Laundering, Terrorist Financing and Other Illicit Activities in accordance with the regulations issued by the UIF.

CONSOLIDATED SUPERVISION

	CONSOLIDATED TEXT			ORIGINAL STANDARD			OBSERVATIONS
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
5.	5.2.1.7.		"A" 4891		8.		According to Com. “A” 5557.
	5.2.1.8.		“A” 2227	sole	5.1.8.		According to Com. “A” 2736.
	5.2.1.9.		“A” 5693				According to Com. “A” 5724 (regulatory clarification).
	5.2.2.		“A” 2227	sole	5.1.		According to Com. “A” 2649, 2461, 2736, 2839, 5180, 5272, 5369, 6306, 6327, 6431, 6639, 6723, 7393, 8445, 8499 and “B” 5902.
	5.2.3.		“A” 4835		4.		According to Com. “A” 5223, 6639 and 6709.
	5.2.4.		“A” 5093
	5.3.1.		“A” 2227	sole	5.2.1.		According to Com. “A” 2649, 5520 and 6639.
	5.3.2.		“A” 2227	sole	5.2.2.		According to Com. “A” 5520 and 6639.
	5.4.1.		“B” 6566		1.
	5.5.		“A” 2227	sole	5.3.		According to Com. “A” 2649.
6.	6.1.		“A” 7982		1.
	6.2.		“A” 7982		2.		According to Com. “A” 8018 (regulatory clarification).