From DR1 news (link may move).
Excerpt:
Now the talk on the news outlets, and user comments found on pages such as Diario Libre's page and other sources are what one can expect in these troubled times: How this move is yet another cheap misguided ploy from the executive to try and halt the rise of the dollar. Now, don't get me wrong, I'm not going to put my money in a BC certificate, and I have no doubt that the executive is trying to do that. I mean, why should I have doubts, when Malkun himself said that's exactly what they want? So, while people condemn the government for "stealing money out of the reserves of private banks" through an illegal scheme (the law project outlining the allocation of pension funds does not include certificates from the BC), I am shocked at a further piece of truth found in the articles (emphasis in bold by me):
Now this alarms me even more. This isn't The Stupid Government Move of the Week. This is an official acknowledgement that the Pensions system is a failed endeavor from the very start. Last year, when the AFPs set out to recruit as many contributors as possible, the flyers handed out sometimes told of really high annual revenues. The quarterly reports I get from my AFP tell me the savings made from the contributions of my employer and me are earning 26% APR in interests. But, as anyone expected and now has been confirmed, this 26% is bunk. Yet, news outlets can't be arsed to stir a scandal about that.
It should be noted, that the translation in DR1's report is a bit off. In Spanish the quote from Persia Alvarez reads as "las cuentas de capitalizaci?n de los fondos registran p?rdidas", which means that "the capitalized interests accounts" are the only ones in deficit. The money contributed so far is there, quite obviously; otherwise the BC wouldn't be drooling over it. However, the RD$ 2,000,000,000 aren't yielding what the AFPs would want you to think. Ever mindful of our healthy sleeping habits, the AFPs (which currently are a sock puppet for the banking sector) are planning on bringing this to our attention say...30 years from now.
Secondly, the Superintendent is not supposed to lobby for failing AFPs. Her job is almost the exact opposite: Denouncing failing enterprises, pursuing AFPs who advertise false revenues and print them on reports to their subscribers. However, Mrs Alvarez is trying to bail out the AFPs. Quite the conflict of interests: for a public official that until recently worked for a major local bank this conduct serves only to raise suspicions.
Thirdly: I don't have simpathy for the tactics of the BC in trying to take cash outside of the economy. However, I hate the attitude of banks and the complacency of the newspapers of how they only get hurt. Originally, the AFP law project prohibited any major involvement of banks in the AFP market. The purpose was to create a separate thriving industry that didn't serve as a safety net for banks. This was changed, and now all the relevant AFPs are de facto subsidiary of banks. However, AFPs are still legally independent entities. This time, the BC is trying to push an illegal move. However, if some legal maneuver were to arise, the AFPs would be totally entitled to taking their money elsewhere. AFPs should be able to take as much money out of any bank, just like I should be able to take my money out of my bank if I so wished. We know that an avalanche of withdrawals can bankrupt a bank. However, the attitude I'm sensing everywhere (bank officials, newspapers, user comments) is that they have a right to hold those funds because releasing them would hurt them. There is no such right. If AFPs were to decide to take their money to Grand Cayman, they should do so and banks should zip it.
It's Friday. Think I'll go sit on a tranquilizer dart for the weekend.
Excerpt:
Now the talk on the news outlets, and user comments found on pages such as Diario Libre's page and other sources are what one can expect in these troubled times: How this move is yet another cheap misguided ploy from the executive to try and halt the rise of the dollar. Now, don't get me wrong, I'm not going to put my money in a BC certificate, and I have no doubt that the executive is trying to do that. I mean, why should I have doubts, when Malkun himself said that's exactly what they want? So, while people condemn the government for "stealing money out of the reserves of private banks" through an illegal scheme (the law project outlining the allocation of pension funds does not include certificates from the BC), I am shocked at a further piece of truth found in the articles (emphasis in bold by me):
Now this alarms me even more. This isn't The Stupid Government Move of the Week. This is an official acknowledgement that the Pensions system is a failed endeavor from the very start. Last year, when the AFPs set out to recruit as many contributors as possible, the flyers handed out sometimes told of really high annual revenues. The quarterly reports I get from my AFP tell me the savings made from the contributions of my employer and me are earning 26% APR in interests. But, as anyone expected and now has been confirmed, this 26% is bunk. Yet, news outlets can't be arsed to stir a scandal about that.
It should be noted, that the translation in DR1's report is a bit off. In Spanish the quote from Persia Alvarez reads as "las cuentas de capitalizaci?n de los fondos registran p?rdidas", which means that "the capitalized interests accounts" are the only ones in deficit. The money contributed so far is there, quite obviously; otherwise the BC wouldn't be drooling over it. However, the RD$ 2,000,000,000 aren't yielding what the AFPs would want you to think. Ever mindful of our healthy sleeping habits, the AFPs (which currently are a sock puppet for the banking sector) are planning on bringing this to our attention say...30 years from now.
Secondly, the Superintendent is not supposed to lobby for failing AFPs. Her job is almost the exact opposite: Denouncing failing enterprises, pursuing AFPs who advertise false revenues and print them on reports to their subscribers. However, Mrs Alvarez is trying to bail out the AFPs. Quite the conflict of interests: for a public official that until recently worked for a major local bank this conduct serves only to raise suspicions.
Thirdly: I don't have simpathy for the tactics of the BC in trying to take cash outside of the economy. However, I hate the attitude of banks and the complacency of the newspapers of how they only get hurt. Originally, the AFP law project prohibited any major involvement of banks in the AFP market. The purpose was to create a separate thriving industry that didn't serve as a safety net for banks. This was changed, and now all the relevant AFPs are de facto subsidiary of banks. However, AFPs are still legally independent entities. This time, the BC is trying to push an illegal move. However, if some legal maneuver were to arise, the AFPs would be totally entitled to taking their money elsewhere. AFPs should be able to take as much money out of any bank, just like I should be able to take my money out of my bank if I so wished. We know that an avalanche of withdrawals can bankrupt a bank. However, the attitude I'm sensing everywhere (bank officials, newspapers, user comments) is that they have a right to hold those funds because releasing them would hurt them. There is no such right. If AFPs were to decide to take their money to Grand Cayman, they should do so and banks should zip it.
It's Friday. Think I'll go sit on a tranquilizer dart for the weekend.
