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10 Int'l Fin. L. Rev. 47 (1991)
Latin America

handle is hein.journals/intfinr10 and id is 343 raw text is: ........... The 30 largest business groups are each required, in consultation with their main creditors, to select three core companies from their sub- sidiaries. These selected core com- panies will be entitled to exemption from these new 'self-support' regula- tions and from basket control on borrowings from banks. The selection of the 30 biggest conglomerates to be placed under tightened credit controls was made on the basis of their total bank loans. Total bank loans to these business groups should not exceed those in the previous year. Kim & Chang Seoul MONGOLIA First banking law approved The Small Hural, Mongolia's lower house of parliament, has approved the country's first banking law, with effect from May 1. The law gives the central bank authority to issue currency and implement policy in currency and credit. The bank will also organise accounting practices among banks and supervise the activities of special banks. BIICL Bulletin BRAZIL Constitutionality of Collor Plan Questions have been raised con- cerning the constitutionality of several provisions of the Collor Plan, especially regarding the freeze, on financial assets. Many judicial ac- tions have been filed by people who, stating that the deposit of their money with the Central Bank of Brazil was unconstitutional, re- quested the immediate return of their confiscated funds. When deciding on an appeal filed International Financial Law Review July 1991 earlier this year by the Central Bank of Brazil, the plenary panel of the Federal Regional Court of the 5th Region unanimously held that the deposit of funds with the Central Bank of Brazil imposed by Law 8024 of April 12, 1990 constituted a compulsory loan, and as such was not allowed by the Constitution. The appellant Central Bank was ordered immediately to release the money on deposit. For the same reasons the plenary panel of the Federal Regional Court of the 3rd Region unanimously held recently that articles 5, 6, 7 8 and 9 of Law 8024 are unconstitutional, and sentenced the Central Bank to return the moneys on deposit to the plaintiff. Both decisions have created prece- dents which further encouraged thousands of people to seek court release of their funds on deposit with the Central Bank. The Federal Supreme Court is expected to have the final word on the matter, as it is in charge of examining cases in which constitutional provisions are being discussed. Legal letter Pinheiro Neto Sdo Paulo ARGENTINA Sale of Treasury bills and Bonex On May 24 1991 Central Bank issued Communication 13742 which establishes the procedure through which the Bank puts for sale External Dollar Bonds 89 (Bonex) and Treasury bills in dollars at 90, 120,150 and 180 days maturity and in australes at 180 days maturity as of May 28 1991. As to Bonex 89 Central Bank may not offer more than five per cent of the daily average of the total amount negotiated the month before. Communication 'A': 1839 states that Central Bank may receive daily purchase offers for Treasury bills in dollars and australes on its portfolio in accordance with the information to be released from time to time. The purchasers must be financial entities covered by law 21256 (Bank- ing Law) registered as Open Markets Agents, and Stock Exchange brok- ers. Third parties must purchase the bills through such entities. The amount should be a multiple of lbn australes or US$100,000. Claudio Onetto Onetto & Asociados Buenos Aires PERU Banking law on interest rates A new law recently promulgated by the President allows financial institutions to set their own interest rates, previously fixed by the Central Reserve Bank. The law reopens the country to foreign banks and lets public sector companies become clients of private banks. New provisions, requiring banks, finance and insurance houses to constitute themselves as limited companies within three months, attempt to reduce the number of parallel or informal banks. Institu- tions will have, however, two years in which to meet the minimum capital requirements under the new regulations. BHCL Bulletin INTERNATIONAL Santiago Initiative The Council of Europe's Latin America/Caribbean-Europe En- counter recently adopted the 'San- tiago Initiative' aimed at giving greater impetus to cooperation be- tween the two regions. The partici- pants at the meeting called for: more balanced financial flows between the two regions and a critical reappraisal of European investment in Latin America to encourage sustainable development that does not endanger natural resources; more efficient democratic control of multilateral trade and financial institutions; the extension of cooperation between Europe and Latin America and the Caribbean to the level of a 'quadrilo- que' involving (i) governments, (ii) parliamentarians, (iii) cities and local or regional authorities and (iv) non-governmental organisations. BIICL Bulletin

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