MercoPress. South Atlantic News Agency

Argentina revokes BONY authorization to operate and act as trustee

Resolution 437/2014 signed by central bank President Fabrega and Superintendent Belmonte, is based on BoNY’s “non-fulfillment of the contract”

Argentina's Cabinet Chief Jorge Capitanich confirmed that the country's Office of the Superintendent of Financial and Exchange Institutions has revoked the authorization for the bank of New York Mellon to operate in Argentina.

 The decision, formalized by the Central Bank resolution 437/2014 signed on Monday by Central Bank’s President Juan Carlos Fabrega and Superintendent Cosme Juan Carlos Belmonte, is based on BoNY’s “non-fulfillment of the contract” as Argentina’s trustee.

The document states that the bank “does not register active operations since December 2012” and that the BoNY “has not financed the country’s residents since January 2013.”

The resolution revokes the authorization given by the national government to Mariel Verónica García Sturzenegger and María de la Cruz Solares to “act in the country in the name and representation of The Bank of New York Mellon.”

Argentina's Congress is debating this week a bill drafted by the Executive to replace BoNY as Argentina’s restructured bonds trustee for the local Nación Fideicomisos.

Cabinet Chief Jorge Capitanich argued that BoNY had “breached the trust agreement.”

“There are two main issues here. The trustee by contract was the bank of New York Mellon and it has breached the contract, which is why it is being replaced by (Banco) Nación. And on the other hand, a change of payment venue is established. It is the way for the debtor to honor its commitments”.

Capitanich again stressed that the proposed debt swap, to be debated at Congress, shows Argentina’s “willingness and ability to pay despite the unfounded, irrational decisions of (US) judge Thomas Griesa.”