COUNTRY PROFILE
Total land area:.................... 173,620 sq. km.
Official language:.................. Spanish
Administrative divisions:....... 19 departments
Legal system:....................... Based upon Spanish code law; accepts
compulsory ICJ
jurisdiction.
Executive branch:.................The president is chief of state and
head of government.
Cabinet‹Council of Ministers appointed by the president.
Legislative branch:............... Bicameral General Assembly consisting
of Chamber of
Senators (30 seats; members are elected by popular vote
to five-year terms) and Chamber of Representatives (99 seats;
members are elected by popular vote to five-year terms).
Judicial branch:.................... Supreme Court. Judges are nominated
by the president and
elected to 10-year terms by the General Assembly.
ECONOMIC PROFILE
Currency: Uruguayan peso ($Ur)
GDP: US$11.1 billion (1997)
Real GDP growth (at market prices): 6.0 (1997p)
GDP (average annual growth rate): 3.1 (1988-1997)
GDP per capita (1990 US$): 3,447.6 (1997)
Consumer price index (average annual growth rate): 19.8% (1997)
Nonfinancial public sector fiscal balance (% GDP): -1.0 (1997)
Money supply (M1) (% GDP): 5.1 (1997)
Interest rates (one-six month domestic currency fixed nominal deposits
at deposit money banks; avg. rate for five most representative private
banks
at end of month): 28.1 (1996)
Current account balance: -US$0.2484 billion (1997)
Trade balance: -US$0.7292 billion (1997)
Main exports: Meat, wool and other animal hair, cereals, leather, textiles,
machinery
and transport equipment, fish, fresh fruit.
Main imports: Machinery and transport equipment, chemicals, fuels and
lubricants,
food, drink, tobacco, metals, textiles.
Nominal exchange rate ($Ur/US$) end of period: 10.0 (1997)
Real effective exchange rate (Index 1990=100): 62.3 (1996)
BANKING INSTITUTIONS
I. Banking Supervision
1. The Central Bank of Uruguay is responsible for supervising banks.
2. It is an independent government agency.
3. The Central Bank reports to the Ministry of Economy.
4. The Central Bank examines banks periodically depending upon each
specific case.
5. The categories of banking supervision are as follows:
Category
Definition
1
Institutions without problems
2
Institutions without apparent problems
3
Institutions with potential problems
4
Institutions with problems
5
Deficient institutions
6. Supervisors use CAMEL or PADUL, a system which looks mostly at management style and operations, in their bank examinations.
II. Consolidated Supervision
1. The Central Bank can
perform consolidated supervision of banking organizations
outside the country. Supervisory authorities request consolidated financial
statements.
Balance sheet items should be evaluated according to the procedures established
by
the Central Bank.
2. Initial approval is needed
from the Central Bank and the host country to open or
close a banking office outside Uruguay.
3. Initial approval is needed
from the Central Bank and the host country to open or close
a foreign banking office in Uruguay.
4. Uruguay has the right
to request information from foreign subsidiaries biannually.
Banks must submit financial statements for offshore branches and subsidiaries
for
which the home bank has more than 50% of voting rights.
III. Interest Rates
1. Interest rates
on loans are determined by the market; however, the government determines
usury rates.
2. Interest rates
on deposits are determined by the market.
IV. Deposit Insurance
1. Uruguay has no system
of deposit insurance.
2. Insurance limits are
not applicable.
V. Trade Finance
1. Uruguay defines trade
finance as funding for the acquisition or production of goods
destined for export (pre-export financing) as well as the actual exporting
of goods
(post-export financing). Finance for working capital is also considered
trade finance.
2. Banks bear the risk of
trade finance vehicles.
3. Trade finance vehicles
are not treated separately in cases of bank liquidation.
4. There are no special
reserve requirements for trade finance obligations during bank
liquidations.
VI. Capital Adequacy
1. The base capital required
to operate a bank is US$6 million.
2. The basic equity responsibility
or minimum capital required to maintain a bank in
operation is the greater of US$6 million, 10% of weighted assets or 4%
of assets and contingencies.
3. There are only two categories
of capital adequacy, adequate or inadequate.
VII. Asset Quality
1. Loans are classified according to the following:
Classification
System
Definition
% of reserves
Normal risk
Up to 30 days
1%
Potential risk
31 to 60 days
7.5%
Real risk
61 to 150 days
25%
High risk
151 to 240 days
50%
Loss
more than 240 days
100%
2. The minimum reserve requirement
is between zero and 100% of loans, depending
on five default risk categories.
3. The legal lending limit
is 25% of net worth without collateral. With special collateral,
the lending limit is 50% of the bank's net worth. With cash collateral,
the limit is
100% of net worth.
4. Investment portfolios
need not be classified under criteria such as hold-to-maturity
portfolio, available-for-sale portfolio or trade portfolio.
5. There is one category
of invested named public issues which should be weighted at
market value on a monthly basis.
6. Portfolio investment
valuation affects the profit and loss statement, as it is based on
market values (mark to market).
VIII. Liabilities
1. The minimum reserve requirements on bank liabilities are as follows:
Category
Local Currency
Foreign Currency
Demand deposit accounts
and deposits for less
than 30 days
10%
10%
Term accounts for
between 30 and 180 days
4%
10%
Term accounts for more
than 180 days
2%
4%
2. Checking, savings and
time deposits can be accepted in both local and foreign currencies.
3. There is no limit on
the amount of deposits that a banking institution can accept.
4. There is no limit on
the concentration of deposits according to specific categories.