Argentine police probe capital flight

Banking rules have sparked protests in Buenos Aires

Argentine police, probing claims of massive capital flight, have raided local offices of several major international banks.

Lawyers said that $26bn was carried on trucks to Buenos Aires' Ezeiza airport and flown out illegally before the government froze bank accounts on 3 December.

The investigation, launched by a judge, is to determine whether public and bank officials were involved in the flight.

The probe came as President Eduardo Duhalde outlined measures to ease restrictions on some banking operations.

Argentines can now move as much as $5,000 from dollar savings accounts to peso accounts at a rate of 1.40 pesos to the dollar.

Operations with cheques and debit cards have also been made easier.

But citizens are still unable to cash the money, and the banks will no longer give out US dollars.

Raids

Argentine police raided the local offices of international banking giants HSBC and Spain's BBVA, as well as American Airlines, hunting for evidence of money laundering.

Later in the day they went to Citibank, Bank Boston and a subsidiary of the Spanish bank Santander, local media reported.

Meanwhile, the government demanded that former president Carlos Menem explain the origin of $10m held in a now frozen Swiss bank account.

The BBC's Tom Gibb said that most of Argentina's rich have become even richer by moving their cash abroad, causing anger among ordinary citizens who are much worse off.

Central bank failure

Earlier in the day, Argentine central bank president Roque Maccarone - criticised for his handling of government banking regulations - resigned.

He is being replaced by his deputy, Mario Blejer.

Mr Maccarone was under pressure to quit after the bank failed to implement anti-crisis financial regulations with sufficient rigour.

After the new Peronist government decreed tighter financial controls, the bank reversed several decisions governing dollar and peso withdrawals.

The confusion added to popular unrest among Argentines, many of whom have taken to the streets in protest.