'We will maintain Citibank’s suspension'

File photo of Economy Minister Axel Kicillof.

Economy Minister Axel Kicillof said the suspension of Citibank Argentina, ordered by the National Securities Commission (CNV) financial watchdog, will stay in place until the bank revokes its agreement not to appeal US Judge Thomas Griesa’s ruling that interest payments on Argentina's restructured local law bonds could not be processed if the bank was allowed to make two one-off payments to help it exit its local custody business.

The official condemned the deal between the bank and the “vulture funds” and said that Citibank is trying to please the vultures and Griesa at the same time but he pointed out that it is leaving its clients (bondholders) helpless.

“(Judge) Griesa in his attempt to extort the country along with vulture funds, has told US Citibank to not let Argentina Citibank to operate with Argentina’s public debt securities in Argentina,” Kicillof explained in an interview with Tiempo Argentino newspaper. “This is a mess because Citibank has opened a branch in this country and it has to comply with this country’s laws.”

The “precautionary suspension” was ordered last Friday as the CNV considered that the bank “did not act according to Argentine banking law” following the agreement signed with so called “vulture funds.”

The Minister said that the government has only reminded the bank that it has to comply with local regulations and are not to “sign agreements that break the law.”

“We will maintain the suspension until they (the bank’s authorities) revoke the agreement,” Kicillof stated.

As long as the suspension stands, Citibank will not be able to operate in the local stock and bonds market, but will be able to continue with its retail activities.