BUENOS AIRES (Dow Jones)–Argentina’s congress has approved the country’s entrance into the regional Banco del Sur multinational lending bank, becoming the fourth South American country to endorse the ambitious social and infrastructure development project.
Argentina’s lower chamber joined the Senate in unanimously approving the creation of the fund Wednesday. The legislatures of Venezuela, Ecuador and Bolivia have already given the bank a thumbs up, while the remaining members–Brazil, Paraguay and Uruguay–have yet to put it to a vote.
The Banco del Sur «will be one more tool to finance economic, social and environmental development in the region and will serve as an instrument to face the consequences of the current economic crisis,» Finance Secretary Hernan Lorenzino said when presenting the bill to the finance commission.
The members of the Union of South American Nations, or UNASUR, have pledged to initially fund the Banco del Sur with $7 billion, with Argentina, Brazil and Venezuela chipping in $2 billion each over the next 5 years, according to state news agency Telam.
The three countries will be able to ask for loans of up to four times their contribution, while the smaller members will be able to borrow up to 10 times what they put in.
Total lending by the Banco del Sur will be limited to three times is net assets.
Source: online.wsj.com