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Argentine Central Bank Tightens Grip on Banking Compliance
In a bid to strengthen its oversight of the financial sector, Argentina’s Central Bank has issued new regulations aimed at ensuring compliance with applicable laws and regulations.
Responsibility for Adhering to Internal Controls
According to a recent communication from the bank, all members of the financial entity are responsible for adhering to internal controls. However, this responsibility is specifically assigned to:
- The board of directors
- Managers
- The audit committee
- The internal auditor
Guidelines for Design and Evaluation of Internal Control Systems
The bank has also established guidelines for the design, instrumentation, evaluation, and reporting strategy of internal control systems. This includes:
- Creating an audit committee comprising at least two members of the board of directors and the internal auditor
- Ensuring functional independence of the internal auditor and ability to assign duties to independent professionals
Bank Capital Requirements
In addition, the Argentine Central Bank has modified its minimum capital requirements for banks, effective from 2013. Banks are now required to maintain a minimum capital level that is higher between:
- Basic exigency (ARS26 million for categories 1 and 2)
- The sum of other exigencies determined by credit risk, interest rate, market risk, and operational risk
Protection of Financial Services’ Users
In January 2013, the bank issued a new regulation to protect financial services users, granting broader rights to banking consumers and establishing more detailed procedures for managing consumer claims. This move is seen as a significant step forward in protecting customers from unfair practices and ensuring their rights are respected.
Anti-Money Laundering and Data Protection
The bank has also implemented anti-money laundering and data protection measures, requiring banks to adhere to strict “know your customer” policies and handle client information with caution. This includes:
- Processing and handling client data in accordance with applicable laws and regulations
Experts Weigh In
According to Daniel Levi, a semi-senior associate at Estudio Beccar Varela:
The measures taken by the Argentine Central Bank demonstrate its commitment to protecting financial services users and promoting transparency in the sector.
Javier L. Magnasco, partner at Estudio Beccar Varela, agrees that the regulations will have a significant impact on the banking industry:
These new requirements will help to ensure that banks are operating in accordance with applicable laws and regulations, which is essential for maintaining trust and confidence in the sector.
Conclusion
The Argentine Central Bank’s efforts to strengthen compliance with banking laws and regulations are seen as a positive step forward in promoting transparency and protecting financial services users. As the bank continues to implement new measures aimed at ensuring compliance, it is likely that the industry will see significant changes in the way banks operate.