Resolution CMN No. 2559 — Amends Resolution No. 2,461 of December 26, 1997 on Credit Contingency for the Public Sector

RESOLUTION NO. 002559

Amends Resolution No. 2,461, of December 26, 1997 - Credit Contingency for the Public Sector.

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on November 5, 1998, based on Article 4, items VI and VIII, of the aforementioned Law, and considering the provisions of Laws Nos. 4,728 of July 14, 1965 and 6,385 of December 7, 1976, Decree-Laws Nos. 1,986 of December 28, 1982 and 2,285 of July 23, 1986, and Articles 28 of Decree-Law No. 73 of November 21, 1966, 4 of Decree-Law No. 261 of February 28, 1967, and 15 and 40 of Law No. 6,435 of July 15, 1977,

RESOLVES:

Art. 1 Amend Article 5 of Resolution No. 2,461 of December 26, 1997, which shall henceforth read as follows:

"Art. 5 Prohibit the application of resources by institutions of the National Financial System and by open and closed private pension entities, insurance companies, capitalization societies, investment funds constituted in the modalities regulated by the Central Bank of Brazil and by the Securities and Exchange Commission, and by investment modalities regulated under the terms of Resolution No. 1,289 of March 20, 1987, in securities and financial instruments, excluding stocks, issued by federal, state, and municipal state-owned companies after June 5, 1998, except when expressly authorized by the Central Bank of Brazil for the exclusive purpose of liquidating external liabilities, up to a limit of 80% (eighty percent) of the outstanding principal."

Art. 2 This Resolution enters into force on the date of its publication.

Art. 3 Resolution No. 2,538 of August 26, 1998 is hereby revoked.

Brasília, November 5, 1998

Gustavo H. B. Franco
President