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Last Updated: Tuesday, 9 October 2007, 02:03 GMT 03:03 UK
New South American bank planned
By James Ingham
BBC News, Caracas

Seven courtiers meet in Brazil to establish bank
The new bank will be backed by seven countries
Seven South American countries will create a new development bank.

Following a meeting in Brazil, finance ministers said the Bank of the South would play a "central role in the new financial architecture of the region".

The bank will have its headquarters in Venezuela, the country that originated the idea.

The idea for this bank was first put forward by Venezuela's socialist President Hugo Chavez, who is keen to reduce US influence in the region.

President Chavez also wants to provide an alternative to lending organisations such as the World Bank and the International Monetary Fund, which he sees as biased, capitalist and imperialist.

Venezuela's Finance Minister Rodrigo Cabeza
Venezuelan Finance Minister Rodrigo Cabeza was pleased at the initiative

The Bank is also part of his agenda to bring about South American unity.

Now with the agreement of Argentina, Brazil, Bolivia, Ecuador, Paraguay and Uruguay, the idea has become a reality and the bank will be launched next year.

There are however some details that still need resolving.

The bank's capital is likely to start at $7bn - not all cash, but certificates it can call on when needed.

But this figure has not been agreed on by all, neither has the exact amount that each country will contribute.

Presidents of all seven nations will sign the deal at a summit in Caracas in November.

SEE ALSO
Venezuela quits Andean trade bloc
20 Apr 06 |  Business
Venezuela to fully join Mercosur
17 Oct 05 |  Americas
South America blocs in trade deal
19 Oct 04 |  Business
Andean nations seek trade boost
28 Jun 03 |  Americas
South American unity pledge
19 Jun 03 |  Americas
Country profile: Venezuela
25 Feb 06 |  Country profiles

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