Regulatory Alerts2005-05-31 | Resolucion 077/2005Added · Updated
Resolution 077/2005
The Board of Directors of the Central Bank of Bolivia amends Article 23 of the Internal Regulations for Operations under the ALADI Reciprocal Payments and Credits Agreement to replace the previous one-year maximum instrument term with a tiered schedule based on long-term credit risk ratings. Authorized institutions with ratings of AAA through A- are permitted to issue or guarantee instruments with maximum terms of 5, 3, 2, and 1 year, respectively, while those rated BBB+ or lower are prohibited from operating in the agreement until they achieve at least an A- rating. These credit risk ratings are updated by the Central Bank of Bolivia whenever rating agencies issue new assessments for the authorized institutions. The modification enters into force on July 1, 2005.
BOARD RESOLUTION NO. 077/2005 SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – MODIFIES THE INTERNAL REGULATIONS FOR OPERATIONS THROUGH THE ALADI RECIPROCAL PAYMENTS AND CREDITS AGREEMENT.
HAVING SEEN: Law No. 1670 of October 31, 1995. The current Reciprocal Payments and Credits Agreement between the Central Banks of the member countries of ALADI and that of the Dominican Republic, as well as its Regulations. Board Resolutions 118/2001 of November 20, 2001, 124/2002 of October 22, 2002, and 077/2004 of June 8, 2004, which approve the Internal Regulations for operations through the ALADI Reciprocal Payments and Credits Agreement and their modifications. The Report from the International Operations Management (GOI) No. 005/2005 of June 8, 2005. The Report from the Legal Affairs Management (SANO) No. 136/2005 of June 10, 2005.
CONSIDERING: That the Report GOI No. 005/2005 from the International Operations Management evaluates the Internal Regulations for operations through the ALADI Reciprocal Credits and Payments Agreement, recommending that the maximum term for instruments issued or guaranteed by Authorized Institutions be modified.
That the Report SANO No. 136/2005 from the Legal Affairs Management states that there is no legal impediment for the Board of Directors to authorize such modification.
THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:
Article 1.- Approve the modification of Article 23 of the Internal Regulations for Operations through the ALADI Reciprocal Payments and Credits Agreement, in the following terms:
SAYS: The maximum term of the Instruments issued and/or guaranteed by the Authorized Institutions shall not exceed one (1) year.
SHOULD SAY: “The maximum term of the Instruments issued and/or guaranteed by the Authorized Institutions shall be adjusted according to the following table:
| Long-term Credit Risk Rating | Authorized to operate in CPCR-ALADI | Maximum term of instruments |
|---|---|---|
| AAA, AA+, AA, AA- | YES | 5 years |
| A+ | YES | 3 years |
| A | YES | 2 years |
| A- | YES | 1 year |
| BBB+ or lower | NO | -.- |
Authorized Institutions with a credit risk rating equal to or lower than BBB+ shall not operate in the CPCR-ALADI until they possess a rating of A- or higher. Credit risk ratings shall be updated at the Central Bank of Bolivia whenever Rating Agencies issue the rating for each of the Authorized Institutions.”
Article 2.- The modification of Article 23 shall enter into force as of July 1, 2005.
Article 3.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.
La Paz, June 14, 2005
Juan Antonio Morales A.
Enrique Ackermann A. José Luis Evia V.
Fernando Paz B.
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