Jorge Carrera on the authorization of credits in dollars: “This regulation could call into question the solidity of the banking system”

The debate on the agenda of the Argentine banking system is centered on the recent relaxation by the Central Bank of regulations for banks to begin granting loans in dollars, in addition to the recent transformation of Banco Nación into a public limited company. In relation to this topic, this media spoke with the former vice president of the Central Bank, Jorge Carrera .

The new regulation allows banks to use funds not coming from depositors to grant loans in dollars to sectors that did not previously qualify. Jorge Carrera clarified a commonly misunderstood point: " It is not true that lending could only be done to exporters , it also included import substitution sectors and others linked to the production of tradable goods."

According to Carrera, this measure responds to pressure from national banks grouped in ADEBA, which sought to expand their credit base. In addition, the Central Bank found in this regulation a mechanism to increase its net reserves, allowing banks to sell dollars loaned to the monetary entity. " The BCRA managed to sustain net purchases of dollars in recent months thanks to this strategy," he said.

What are the risks of taking out a loan in dollars?

One of the most sensitive points of this easing is the risk of exchange rate mismatch. "If companies or families with income in pesos take out loans in dollars, they could face serious problems in the event of a devaluation ," warned the interviewee. An increase in defaults could impact the health of banks and generate distrust among depositors, something that Argentina has so far managed to avoid.

"We have had currency crises for over 20 years without affecting the banking system. This law could call that solidity into question ," he warned.

Banco Nación and the factors to be taken into account regarding its conversion into a public limited company

The government announced the transformation of Banco Nación into a public limited company, which could open the door to the incorporation of private capital. Carrera expressed caution about this measure: "The change in the corporate structure is not the problem in itself, but what is the real objective behind this decision ."

While he acknowledged that the stock market listing could improve the bank's transparency, he also warned of the risk of a covert privatisation. "If this is done without a law from Congress and only by decree, we would be facing an illegality ," he stressed.