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Bank of New York Kicked Out of Argentina

Aug. 26, 2014 (EIRNS)—Argentine Chief of Staff Jorge Capitanich announced in this morning’s press conference that the Central Bank’s Superintendant of Financial and Exchange Entities has revoked the operating license of the Bank of New York-Mellon, denying it the ability to maintain a branch in the country.

The Superintendant’s Resolution 437, dated Aug. 25, states that BoNY has not carried out any "active operations, nor have there been any active operations since December of 2012." It has also failed to offer financing or other financial services to any resident of Argentina since January of 2013 to date, thus not meeting the requirements demanded of any foreign bank operating in the country.

The government bill proposing to open a new voluntary debt swap to restructured bondholders under Argentina law, to be debated in the Senate on Aug. 27, also authorizes the Finance Ministry to "take necessary steps" to remove BoNY as the country’s trustee bank for the 2005 and 2010 debt restructuring. BoNY violated the terms of the restructuring contract, by failing to pay bondholders on the June 30 deadline, despite the fact that Argentina deposited $539 million in BoNY’s account for that purpose on June 27.

Capitanich also pointed out that a group of hedge funds, including George Soros’s Quantum Partners and Kyle Bass’s Hayman Capital, has filed a lawsuit against BoNY in London, demanding a 226-million-euro interest payment, blocked by New York Judge Thomas Griesa last month. The New York Times reported today that the plaintiffs argue that, since the interest payment they are owed is governed by British law, Griesa has overstepped his jurisdiction in blocking their payment.