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Latin American nations form Bank of South

BUENOS AIRES (ARGENTINA): Presidents from six Latin American nations on Sunday signed a document creating the Bank of the South, a regional development bank launched with capital from Venezuela, Bolivia and Argentina.

Presidents Nestor Kirchner of Argentina, Hugo Chavez of Venezuela, Luiz Inacio Lula da Silva of Brazil, Evo Morales of Bolivia, Rafael Correa of Ecuador and Nicanor Duarte of Paraguay signed the document. Uruguayan President Tabare Vazquez is expected to sign the document later.

The Presidents had previously said the bank aims to boost economic growth with cheap credit for infrastructure projects and private sector projects.

Mr. Chavez said the bank was the first step in creating a single currency to replace the U.S. dollar, and that step by step, it will replace the IMF and World Bank.

Its head office will be based in the Venezuelan capital of Caracas, with two branches: in the Argentine capital of Buenos Aires and Bolivia’s legislative capital La Paz.

The bank, with $7 billion as start-up capital, will be run by a Board of Directors made up of the Economy Ministers of member states. Each member of the Bank of the South will have a veto.

The bank came into being as international financial institutions have been witnessing a waning influence in South America. In the 1990s, Brazil and Argentina were plunged into economic crises. The IMF came to their rescue by providing loans, but it demanded that the two countries adopt stringent financial policies. — Xinhua

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