Resolution 142/2004 — BCB — BO

BOARD RESOLUTION NO. 142/2004
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES DISBURSEMENT OF FINANCIAL SUPPORT FOR THE RESOLUTION PROCESS OF MUTUAL DEL PUEBLO.

HAVING SEEN:

Law No. 1670 of the Central Bank of Bolivia of October 31, 1995.

Law No. 1488 on Banks and Financial Entities of April 14, 1993, Consolidated Text by Supreme Decree No. 26851 of April 3, 2002.

Law No. 2297 on Strengthening Financial Regulation and Supervision of December 20, 2001.

Law No. 2196 on the Special Fund for Economic Reactivation and Strengthening of Financial Entities of May 4, 2001.

Law No. 2682 of May 5, 2004.

Supreme Decree No. 27025 of May 6, 2003.

Resolution of the Superintendence of Banks and Financial Entities SB/079/2004 of September 21, 2004, which orders the intervention of the Mutual Savings and Loan Association for Housing Mutual del Pueblo, with the objective of applying the resolution or forced judicial liquidation procedures.

Note from the Superintendence of Banks and Financial Entities, SB/ISL/D-59900/2004 of September 22, 2004, requesting support for the resolution process of the Mutual Savings and Loan Association for Housing Mutual del Pueblo.

Report from the Financial Entities Management GEF No. 281/2004 of September 23, 2004.

Report from the Legal Affairs Management SANO No. 245/2004 of September 22, 2004.

CONSIDERING:

That through Resolution SB No. 079/2004, the Superintendence of Banks and Financial Entities, in application of Article 120, paragraph a) of Law No. 1488, has ordered the intervention of the Mutual Savings and Credit Association for Housing Mutual del Pueblo, with the objective of applying the resolution procedure established in Title IX, Chapter IV of the aforementioned Law.

That Article 125, paragraph b) of Law No. 1488, establishes that to successfully carry out the resolution procedure, the Financial Restructuring Fund (FRF), at the discretion of the Superintendence of Banks and Financial Entities, may support the trust referred to in paragraph d) of Article 124 of the aforementioned Law with cash contributions or bonds, in exchange for a secondary participation interest in the same.

That Article 125 of Law No. 1488, in its fifth paragraph, states that until January 1, 2005, the support mechanisms under the FRF will be carried out by the Central Bank of Bolivia on behalf of the General Treasury of the Nation, whose total contribution may not exceed fifty percent (50%) of the privileged obligations of the intervened financial intermediary entity.

That Article 3 of Supreme Decree No. 27025 authorizes the General Treasury of the Nation to support, through the Central Bank of Bolivia, the intervention of non-banking Financial Intermediation Entities when they do not have sufficient liquid assets to cover intervention expenses and liquidity deficiency to enable the resolution process. Likewise, that at the request of the Superintendence of Banks and Financial Entities, the Central Bank of Bolivia on behalf of the General Treasury of the Nation, will disburse said resources in the currency requested, in favor of the intervened entity.

That the Superintendence of Banks and Financial Entities, through note SB/ISL/D-59900/2004 in application of Article 125 of Law No. 1488 and Article 3 of Supreme Decree No. 27025, has requested from the Central Bank of Bolivia the sum of $US 84,402.87 corresponding to 50% of the privileged obligations and additionally $US 84,402.87 and Bs 639,038.40 in cash, for support of the resolution process of the Mutual Savings and Loan Association for Housing Mutual del Pueblo.

That the Financial Entities Management in its Report GEF No. 281/2004, states that the amounts requested by the SBEF for support of the resolution process are within the limit established in Article 125 of Law No. 1488 and the scope of Article 3 of Supreme Decree No. 27025, therefore recommending to the Board of Directors the consideration of the aforementioned request.

That the Legal Affairs Management, in Report SANO No. 245/2004, states that the SBEF request is framed within the current legal norms, therefore the Board of Directors of the Issuing Entity has competence to approve the disbursement of the resources requested by it in order to support and enable the resolution process of the Mutual Savings and Loan Association for Housing Mutual del Pueblo, corresponding to the Board of Directors to authorize Mr. President of the BCB to sign a Contract with the TGN, for the compensation of the support granted through bonds.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Authorize, on behalf of the General Treasury of the Nation, the disbursement in favor of the Intervened Mutual Savings and Loan Association for Housing Mutual del Pueblo, the sum of $US 84,402.87 (Eighty-four thousand four hundred two and 87/100 American dollars) corresponding to 50% of the privileged obligations provided for in Article 125 of Law No. 1488, for support of its resolution procedure.

Article 2.- Authorize, on behalf of the General Treasury of the Nation, at the request of the Superintendence of Banks and Financial Entities, the disbursement in favor of the Intervened Mutual Savings and Loan Association for Housing Mutual del Pueblo, of Bs 639,038.40 (Six hundred thirty-nine thousand thirty-eight and 40/100 Bolivianos) and $US 84,402.87 (Eighty-four thousand four hundred two and 87/100 American dollars) to cover liquidity deficiencies and enable the resolution procedure, contemplated in Article 3 of Supreme Decree No. 27025.

Article 3.- Authorize the Financial Entities Management to proceed with the transfer of resources from the RAL Fund of the intervened entity to its legal reserve accounts in cash.

Article 4.- Authorize the President of the BCB to sign, with the Minister of Finance, the Agreement by means of which the compensation in bonds for a term of fifteen (15) years will be carried out, for the disbursements determined in Articles 1 and 2 of this Resolution, and under the terms and conditions established in Supreme Decree No. 27025.

Article 5.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, September 24, 2004.

Juan Antonio Morales A.

Juan Medinaceli V. Enrique Ackermann A.

José Luis Evia V. Fernando Paz B.

Jaime Apt B.