Regulatory Alerts2005-06-28 | Resolución 084/2005Added · Updated
Resolution 084/2005
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 establish maximum tenors for instruments based on credit risk ratings. Authorized institutions with ratings of AAA through AA- are permitted a maximum tenor of five years, while those rated A+ and A- are limited to three and two years respectively. Institutions rated BBB+ or lower are prohibited from operating in the agreement until they achieve at least an A- rating, and the new tenor limits take effect on August 1, 2005.
BOARD RESOLUTION NO. 084/2005
SUBJECT: BOARD – AMENDS ARTICLE 23 OF THE INTERNAL REGULATIONS FOR OPERATIONS THROUGH THE ALADI RECIPROCAL PAYMENTS AND CREDITS AGREEMENT.
HAVING VIEWED:
Law No. 1670 of October 31, 1995.
The Statute of the Central Bank of Bolivia of December 13, 2005.
The current Reciprocal Payments and Credits Agreement between the Central Banks of the member countries of ALADI and the Dominican Republic, as well as its Regulations.
Board Resolution No. 038/2000 of June 20, 2000, which approves the Regulations for the Authorization of Banks as Authorized Financial Entities (EFA).
Board Resolutions 118/2001 of November 20, 2001, 124/2002 of October 22, 2002, 077/2004 of June 8, 2004, and 077/2005 of June 14, 2005, which approve the Internal Regulations for Operations through the ALADI Reciprocal Payments and Credits Agreement and their modifications.
CONSIDERING:
That Article 11, numeral 30 of the Statute of the Issuing Entity, concordant with Article 54, clause (o) of Law No. 1670, empower the Board to approve, interpret, and modify the Statute and Regulations of the BCB by two-thirds of the votes of the total number of its members, without the need for any additional administrative act.
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 be adjusted according to the following table:
Long-Term Credit Risk Rating Authorized to operate in the CPCR-ALADI Maximum term of the 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 that have a credit risk rating equal to or lower than BBB+ shall not operate in the CPCR-ALADI until they have a rating of A- or higher.
Credit risk ratings shall be updated at the Central Bank of Bolivia each time the Rating Agencies issue the rating for each of the Authorized Institutions.
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 Maximum term of the instruments
AAA, AA+, AA, AA- 5 years
A+ 3 years
A 2 years
A- 1 year
BBB+, BBB, BBB- 6 months
Credit risk ratings shall be updated at the Central Bank of Bolivia each time the Rating Agencies issue the rating for each of the Authorized Institutions.”
Article 2.- The modification of Article 23 shall enter into force as of August 1, 2005.
Article 3.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.
La Paz, July 12, 2005
Juan Antonio Morales A.
Enrique Ackermann A. José Luis Evia V.
Fernando Paz B. Jaime Apt B.
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