Pursuant to Law N° 25,780, published in the Official Gazette on September 8, 2003, the Argentine Congress passed certain amendments to the Financial Entities Law ("FEL") and to the Charter of the Argentine Central Bank (the "ACB").
The new Law authorizes the ACB to lend to the National Treasury up to 10% of the aggregate annual tax collection funds in cash. However, these funds cannot exceed 12% of the monetary base, with the exception of those funds that have been disbursed to cancel obligations with multilateral credit institutions.
Also, it sets forth a protection system for directors and officers of the ACB, by establishing that "the opportunity, merit and convenience" of all decisions taken by the ACB or by the Superintendence of Financial and Exchange Institutions "shall only be reviewed by the courts and in such cases of evident unreasonability and arbitrariness".
Within the most relevant new provisions, we can mention the following:
(i) more power is granted to the ACB in order to carry on proceedings for the exclusion of assets and liabilities of financial entities in process of sale, merger or liquidation, with more flexibility to make the valuation of them;
(ii) the ACB may authorize and request the transfer of such excluded assets and liabilities in favor of other financial institutions, or to transfer those assets in fiduciary property to financial trusts;
(iii) in cases of suspension of financial entities, the ACB must request the judicial intervention of such entity, replacing the authorities that may be in office at that time;
(iv) the judicial intervention shall be effective immediately and the ACB shall designate the new authorities of such financial institution;
(v) all resolutions taken by the ACB in relation to such assets and liabilities or those related to the restructuring of a financial entity, shall not require prior judicial approval;
(vi) the ranking of secured creditors in cases of liquidation of financial entities, has been modified, having depositors (either individuals or legal entities) a general preference up to $50,000 or its equivalent in foreign currency, with the exception of creditors with special preference (mortgages or pledges) and labor creditors included in the FEL;
(vii) while the emergency law N° 25561 is effective (until the end of 2003 and may be prorogated), the ACB may grant financial assistance to financial entities with liquidity or solvency problems;
(viii) in order to assure that the ACB is the exclusive entity for the issuance of national currency, the Charter of the ACB forbids the issuance of instruments that could be directly or indirectly forced or induced to be used for canceling any kind of debts or, if issued, its nominal value is equal or less than 10 times the value of the higher denominated bill in circulation;
(ix) general rules in effect for the Public Administration are not applicable to the ACB, in particular, if they imply any "limitation to the capacity or powers" granted by the Charter;
(x) the National Auditing Agency shall be the external controlling agency of the ACB.
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