The president of the Association of Banks of Argentina (ABA), Claudio Cesario, assured that the volume of banknotes issued is “so crazy” that to illustrate the problem, if we align them we can circle the Earth 43 times or we could build four towers to the Moon.
The president of the Association of Banks of Argentina (ABA), Claudio Cesariotook stock of the activity in 2024 at the annual press event. From there he expressed that “The issuance of higher denomination banknotes requires the prompt and urgent demonetization of lower value banknotes”which he expressed, “in basic Spanish and so that it is understood: there is no installed capacity to store them.”
In this regard, he illustrated that “the volume of bills issued is so crazy that to illustrate the problem if we align them “We can go around the Earth 43 times or we could build four towers on the Moon.”. As additional information, he said that The storage capacity in thousands of bills of the main collecting banks is greater than that of the New Orleans Federal Reserve.
“A nonsense of installed capacity and resources used if we compare the value of what is stored”declared the banker.
The analysis of 2024: how was the view from ABA
“This year we were able to work with banks again to provide financing in pesos after the elimination of numerous restrictions and unsustainable limits for financial intermediation and because inflation is falling, which was our main complaint,” said Cesario and added: “Demand reappeared and surely the most notable thing was that we managed to revive mortgage loans, after we managed to resist almost alone so that the contracts were not modified.”
Looking ahead to 2025, he expressed: “An important issue to resolve, even though notable progress was made this year, has to do with cash administration and management. As you know, years and years with High inflation and no issuance of larger denomination bills caused the accumulation of bills in the banks’ treasuries that have exceeded the BCRA’s capacity to receive and store them.to the point that entities have had to build new vaults.”
“As I said, this year we made important progress in the matter, we believe that in a crisis situation the procedures for the demonetization of damaged banknotes should be further simplified and resources optimized. Just as the BCRA first did with the $100 bills, $200 bills and $500,” Cesario added and concluded: “We need that, with the arrival of the $20,000 bill, the process of destruction and subsequent demonetization of the $1,000 bill be simplified and accelerated. This without prejudice to simultaneously promoting the growth of the use of digital payment methods.”
“Another issue to take into consideration and that we should resolve is the free nature of a lot of transactions. All the pesos that leave the system, in addition to feeding the black economy, are the pesos that later return to the banks for safekeeping. until they withdraw again, in a vicious never-ending cycle. What’s more, this free payment encourages many to do excellent business, leaving the operating costs to be absorbed by the banks,” he said.
Source: Ambito
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