The regulatory regime applicable to banks
The Argentine banking industry is subject to strict regulations and controls, mainly provided by the Financial Institutions Law (FIL), which has been regulating banking activities in Argentina since 1977. At the same time, the FIL places the supervision and control of the Argentine banking system on the BCRA.
The BCRA is an autonomous organism in charge of enforcing all financial regulations. It is ruled internally by its Organic Chart, which determines its powers and functions as the lead regulator of the banking system.
The functions carried out by the BCRA can be grouped into two: all the concrete measures and actions taken to promote monetary and financial stability, which are the typical functions performed by central banks; and the regulatory faculties, which include the elaboration and enforcement of the regulations necessary to achieve its aims. Regarding its regulatory faculties, the BCRA has vested, through its Organic Chart, its supervisory powers and the enforcement of regulations enacted by it to the Superintendency of Financial and Foreign Exchange Institutions (Superintendency).
The FIL has explicitly conferred to the BCRA the following powers:
- granting and revoking bank licences;
- authorising the establishment of bank branches abroad;
- approving bank mergers, capital increases and certain transfers of stock;
- setting minimum capital, liquidity and solvency requirements and lending limits;
- granting credit facilities to financial institutions in cases of liquidity problems; and
- promulgating all the regulations that are deemed necessary for such purposes.
Regulations enacted by the BCRA are known as communications, and play an essential role in the banking regulatory system. The BCRA is also the enforcement authority of the foreign exchange market, regulating all relevant aspects of it. Furthermore, the BCRA regulates certain effects produced in the banking system by some other specific regimes, such as those introduced by the following regulations:
- the Capital Markets Act;
- the Anti-Money Laundering Act;
- the Credit Cards Act;
- the Data Protection Act;
- the Antitrust Act; and
- the Consumer's Defence Act.