Resolution 038/2008: Approval of Long Position for Mutual and Cooperative Institutions

BOARD RESOLUTION NO. 038/2008
SUBJECT: ECONOMIC POLICY ADVISORY AND MANAGEMENT OF FINANCIAL ENTITIES – APPROVAL OF LONG POSITION FOR MUTUAL SYSTEM INSTITUTIONS AND COOPERATIVES.

HAVING SEEN:

Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB).
The Statute of the BCB approved by Board Resolution No. 128/2005 of October 21, 2005, modified by Board Resolutions No. 31/2006 and No. 021/2008 of April 18, 2006, and February 26, 2008, respectively. Board Resolution No. 122/2007 of September 25, 2007, which approves the Exchange Position Regulation for the Financial System. Board Resolution No. 154/2007 of December 18, 2007, which extends until April 1, 2008, the deadline for the application of the Exchange Position Regulation for the Financial System for Institutions of the Mutual System and Cooperatives. The note cite UNIVIV-0115/2008 of February 22, 2008, from the Bolivian Union of Savings and Loan Financial Entities. The Technical Report APEC-INEP No. 009/2008 / GEF-SANA No. 174/2008 of March 24, 2008. Act No. 006/2008 of March 24, 2008, of the Financial System Analysis Committee. The SANO Report No. 072/2008 of March 25, 2008, from the Legal Affairs Management.

CONSIDERING:

That the BCB, in compliance with Law No. 1670, has established an Exchange Position Regulation of mandatory compliance by the Institutions of the Financial System.

That in virtue of what is provided in articles 44 and 54 subsections a) and q) of Law No. 1670, the highest authority of the BCB is its Board of Directors, responsible for defining policies and specialized general application regulations, for which it is empowered to issue norms and adopt general decisions that may be necessary for the BCB to fulfill the functions, competencies, and powers recognized by legal mandate, and to carry out all those activities that are necessary in order to comply with its functions.

That article 11 numeral 12) of the BCB Statute establishes that the Board of Directors of the Issuing Entity has the attribute to determine the exchange regime and the exchange policy of the country.

That by Board Resolution No. 122/2007, the Exchange Position Regulation for Banking and Non-Banking Financial Entities was approved, effective from January 1, 2008.

That by Board Resolution No. 154/2007, the Board of Directors of the Issuing Entity approved the extension until April 1, 2008, of the deadline for the application of the Exchange Position Regulation for the Financial System for Institutions of the Mutual System and Cooperatives.

That as recommended by the Economic Policy Advisory and the Management of Financial Entities, in their Report APEC-INEP No. 009/2008 GEF-SANA No. 174/2008, it is necessary: "...adjust the limit established by Board Resolution No. 122/2007 for the long position in foreign currency for mutuals and cooperatives up to 80% of the applicable accounting equity starting from April 1, 2008, and reduce it gradually to 75% starting from September 1, 2008, and to 70% starting from December 31, 2008 (...)". According to the report, this proposal aims to promote a gradual adjustment that will be monitored.

That the Legal Affairs Management in its Report SANO No. 072/2008 states that there is no legal impediment for the Board of Directors of the Issuing Entity, in the exercise of its powers, to consider the approval of the proposal technically supported by the Economic Policy Advisory and the Management of Financial Entities, in Report APEC-INEP No. 009/2008 GEF-SANA No. 174/2008, under the protection of what is provided by Law No. 1670 and its Statute.

That according to article 54 subsection o) of Law 1670, the Board has the attribute to approve, modify, and interpret the Statute and Regulations of the BCB by two-thirds of the votes of all its members, without the need for any additional administrative act.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Authorize Financial Institutions of the Mutual System and Cooperative Savings and Loan Institutions Open, duly authorized by the Superintendence of Banks and Financial Entities, to maintain a long position up to the equivalent of:

a) 80% (EIGHTY PERCENT) of the value of accounting equity from April 1 to August 31, 2008. b) 75% (SEVENTY-FIVE PERCENT) of the value of accounting equity from September 1 to December 30, 2008. c) 70% (SEVENTY PERCENT) of the value of accounting equity from December 31, 2008.

Article 2.- This Resolution shall enter into force from April 1, 2008, rendering ineffective what was established in Board Resolution No. 154/2007.

Article 3.- From December 31, 2008, Financial Institutions of the Mutual System and Cooperative Savings and Loan Institutions Open shall be subject to what is established in the Financial System Exchange Position Regulation.

Article 4.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, March 25, 2008

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Raúl Garrón Claure

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Gustavo Blacutt Alcalá Hugo Dorado Araníbar

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Rolando Marín Ibáñez Ernesto Yáñez Aguilar Osvaldo Nina Baltazar