Includes special features of this country’s banking system and rules/laws that might impact U.S. business.
Last Published: 7/25/2019
How Does the Banking System Operate?
In Argentina, Law No. 21,526  (1977) governs banking activities.  Under this law, Argentina’s Central Bank (BCRA) is the implementing authority and the regulatory body, which issues standards and controls activities of financial institutions included in the law (authorization and operating conditions within the banking industry; definition of permitted, prohibited, and limited transactions; monetary controls; operating ratios enforcement; information; accounting and control systems; dissolution and liquidation; etc.).  In order to operate in Argentina, foreign banks must register with the BCRA and obtain appropriate authorization prior to engaging in banking activities in the country.  In addition, there are minimum capital requirements for these entities to be allowed to do business.

Features of the Argentine Financial System
Classification:
  • Commercial banks
    • Government-owned: federal, provincial and municipal.
    • Private local banks with Argentine capital: cooperative banks and non-cooperative banks.
    • Foreign banks: private local banks, and local branches of foreign banks.
  • Investment banks
    • Government-owned provincial banks.
Additionally there are Local banks with foreign capital, Mortgage banks, Development banks, Savings banks, Finance companies, Savings and loan associations for building homes or other real estate property, Credit associations and Representative offices.

Financial transactions are generally made in Argentine Pesos (legal tender), U.S. dollars, and government securities.  The three segments making up Argentina's financial system are: Argentine pesos, foreign currency, and the liquid assets under management of all banks in the financial system.
The main transactions are: Overdraft, Promissory notes, Discount of bills, Mortgage loans, Collateral loans, Consumer loans, Credit cards, Demand deposits, Certificates of deposit, Common savings deposits, Deposits in Argentine government securities, Interbank transactions, Swaps, Bankers acceptances, Spot exchange transactions and Forward exchange transactions.
In the late 1990s, there were 120 banks operating in Argentina, whereas today there are approximately 60, due to  the fallout from the 2002-2003 Argentine Peso devaluation crisis.  However, the current financial system is perceived to be healthier than it was in the last decade.  Most financial institutions in Argentina plan to continue expanding operations in order to achieve greater financial margins.

Banks currently enjoy higher-quality client portfolios than in the pre-2002 scenario.  Better clients translate into lower credit risk, and as the perception of risk decreases, credit is expected to gradually become more accessible in the coming term.

 

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