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Cristina Fernandez warns Citibank must comply with Argentine law

Saturday, March 21st 2015 - 05:55 UTC
Full article 24 comments
Banks operating in Argentina “must obey Argentine laws, just like in every country. We're no different,” the president said. Banks operating in Argentina “must obey Argentine laws, just like in every country. We're no different,” the president said.
Citibank pleaded with Griesa to let it handle payments on bonds issued under Argentine law, but he rejected the bank's request last week Citibank pleaded with Griesa to let it handle payments on bonds issued under Argentine law, but he rejected the bank's request last week

President Cristina Fernandez warned on Friday that banks operating in Argentina must obey its laws, amid a row over Citibank's refusal to defy a US court order blocking Buenos Aires from repaying its restructured debt. At the end of the month, 31 March, Citibank as custodial has to pay Argentine restructured bonds.

 Banks operating in Argentina “must obey Argentine laws, just like in every country. We're no different,” the president said. Even when she did not mention Citibank by name, the comment was widely seen as a veiled reference to the US bank.

Citibank has been drawn into a bitter court battle between Argentina and two hedge funds that refuse to accept the country's bid to restructure the debt it defaulted on during its 2001 economic crisis.

US District Judge Thomas Griesa has blocked Citibank from processing payments to other creditors who agreed to take heavy losses on the face value of their Argentine bonds until the country settles its $1.3-billion dispute with the holdouts which the Argentine government calls the “vulture funds.”

President Fernandez government, which has been forced into a new default by the ruling, has threatened to revoke Citibank's Argentine banking license if it does not process the payments.

Citibank pleaded with Griesa to let it handle payments on bonds issued under Argentine law, but he rejected the bank's request last week, threatening to hold it in contempt of court if it failed to comply.

Argentina's 2001 default on $100 billion in debt was the largest in history at the time. In 2005 and 2010, the majority of the country's creditors agreed to take “exchange bonds” at a steep write-down. But the two US hedge funds, NML Capital and Aurelius Capital Management, sued for full payment and won.

“We will defend the bondholders who believed in us in 2005 and 2010,” Cristina Fernandez said. Citigroup said Tuesday it plans to exit its Argentine custody business “as soon as possible”.

However Citibank will be forced to make a decision at the end of the month: either it pays restructured bond holders and falls in contempt of court before a US federal court, or does not comply with custodial duties and is exposed to the wrath of the Cristina Fernandez administration, including the loss of its license to operate in Argentina.

Top Comments

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  • yankeeboy

    Let's see if the Citi Expat employees start leaving en masse.
    If there are any left that is...

    If its a choice of defying a US Federal Judge or a Lithium Soaked Screwball I think they've already made the decision.

    Mar 21st, 2015 - 11:12 am 0
  • Englander

    Nice hair. Would think she would have gone grey long ago with all the stress....even bald.

    Mar 21st, 2015 - 11:27 am 0
  • yankeeboy

    2. She paid good money for that crooked wig.

    Mar 21st, 2015 - 11:36 am 0
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