Inter-American Development Bank President Enrique V. Iglesias and Guillermo Zoccali Argentine Executive Director at the International Monetary Fund today signed the documents for the reformulation of $250 million in fast-disbursing financing to Argentina that will allow for the immediate disbursement of $125 million.
The disbursement will be made in recognition of the advances achieved by Argentine authorities in several areas such as strengthening the regulations and supervision of the insurance sector with a risk-based approach, cancelling significant debts that the Instituto Nacional de Reaseguros had with the private sector, and codifying the Transparency Decree that establishes new standards of corporate governance for publicly traded companies.
The reformulation of the operation approved today by the IDB Board of Executive Directors indicates the IDB´s continuing confidence in the country’s ongoing economic recovery and stabilization.
The $250 million financing was originally part of a $500 million fast-disbursing loan to Argentina approved in 2001 to support financial sector reform in the areas of pensions, insurance and capital markets.
Because of a crisis in late 2001 that complicated the adoption of some policies, part of the program could not be carried out, and only half the funds were disbursed.
The reformulated program objectives include to provide greater stability to the pension system and institute more rigorous supervision, enhance transparency and competition in the retirement insurance industry, as well as reduce costs and improve competition and efficiency of private pension administrators known as AFJPs. Disbursement of the final tranche of $125 million will depend on the fulfillment of these objectives.