Regulatory Alerts1999-09-14 | Resolución 078/99Added · Updated
Resolution 078/99: Temporary Flexibility of Financial Conditions for Liquidity Credits to Banking Entities
The Board of Directors of the Central Bank of Bolivia temporarily relaxes the financial conditions for liquidity credits granted to banking entities. Interest rates are set at the second tier rate of credits guaranteed by the RAL Fund plus 250 basis points, and collateral requirements allow for a 1.5-to-1 ratio of normal portfolio loans or existing guarantees. All other terms of the Liquidity Credits Regulation remain unchanged, and this measure is effective as of September 16, 1999.
BOARD RESOLUTION NO. 078/99 SUBJECT: ECONOMIC POLICY ADVISORY – TEMPORARILY FLEXIBLE FINANCIAL CONDITIONS FOR LIQUIDITY CREDITS FOR BANKING ENTITIES.
HAVING REVIEWED: Law No. 1670 of October 31, 1995. The Regulation of Liquidity Credits to Entities of the Financial Intermediation System, approved by Board Resolution of the Central Bank of Bolivia (BCB) No. 059/98 of June 9, 1998. The Conclusions of the Expanded Meeting of the National Council of Economic Policy (CONAPE) of September 10, 1999. The Report of the Economic Policy Advisory No. 017/99 of September 15, 1999. The Report of the Legal Advisory ALEG No. 143/99 of September 16, 1999.
CONSIDERING:
That on September 10, 1999, an Expanded Meeting of the National Council of Economic Policy (CONAPE) was held with the participation of the President of the Central Bank of Bolivia, the Superintendent of Banks and Financial Entities, and the Superintendent of Pensions, Securities, and Insurance, in order to evaluate the needs of the productive sector emerging from an unfavorable international economic environment.
That in said meeting, it was agreed to request the BCB to flexibly adjust the access regime to liquidity credits for banking entities.
That in virtue thereof, it has been decided to temporarily flexibly adjust the financial conditions of the loans regulated by the Regulation of Liquidity Credits approved by Board Resolution of the BCB No. 059/98 of June 9, 1998.
//2. B.D. No. 078/99
That in the opinion of the Legal Advisory, the Board is authorized to approve, modify, and interpret the regulations issued by the Central Bank of Bolivia, in accordance with Article 54, subsection o) of Law No. 1670 of October 31, 1995.
THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA
RESOLVES:
Article 1.- Temporarily flexibly adjust access to liquidity credits of the Central Bank of Bolivia for banking entities, in order to support the efforts agreed upon in the expanded meeting of CONAPE dated September 10, 1999.
Article 2.- Establish, for the purpose stated above and on a temporary basis, the following financial conditions for loans regulated by the Regulation of Liquidity Credits approved by Board Resolution of the BCB No. 058/98:
Interest: The interest rate shall correspond to that of the second tier of credits guaranteed by the RAL Fund plus two hundred fifty basis points.
Collateral: a) those established by Article 16 of the Regulation of Liquidity Credits to Entities of the Financial Intermediation System of June 9, 1998, or alternatively,
b) portfolio 1 (normal) in a 1.5 to 1 proportion relative to the loan amount, with real guarantees from clients who have been with the Entity for at least two years, whose amortizations and interest payments have not suffered more than two delays.
//3. B.D. No. 078/99
EFA Condition: Banking entities that access these credits will maintain their status as Accredited Financial Entity (EFA).
Article 3.- All other terms and conditions of the Regulation referred to in the preceding article remain unchanged.
Article 4.- The Presidency and the General Management are charged with executing this Resolution.
La Paz, September 16, 1999
Juan Antonio Morales A.
Armando Pinell S.
Jaime Ponce G.
Juan Medinaceli
Fernando Campero P.
Armando Méndez M.
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