CELEX: 51978PC0321
Language: en
Date: 1978-07-11 00:00:00
Title: Recommendation for a COUNCIL DECISION concluding the Agreement in the form of an Exchange of Letters between the European Economic Community and the Bank for International Settlements concerning the mobilization of claims held by Member States under the medium-term financial assistance arrangements (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78) 321
Vol. 1978/0120
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
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p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
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file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                 COM(78)321 final.
                                                 Brussels , 11 July 1978
                           Recommendation for a
                             COUNCIL DECISION "
    concluding the Agreement in the form of an Exchange of Letters
       between the European Economic Community and the Bank for
       International Settlements concerning the mobilization of
          claims held by Member States under the medium-term
                    financial assistance arrangements
              ( submitted to the Council by the Commission)
                                                                         »
COM(78) 321 final .
 ---pagebreak---                                   RECOMMENDATION
 For a Council Decision concluding the Agreement in the form of an Exchange
 of Letters between the European Economic Community and the Bank for Interna­
 tional Settlements concerning the mobilization of claims held by Member
 States under the medium-term financial assistance arrangements .
 THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
 Having regard to the Treaty establishing the European Economic Community /
 Having regard to Council Decision 71 / 143 / EEC of 22 March 1971 setting up
                                                      (1 )
 machinery for medium-term financial assistance            , as last amended by
                        (?)                                                        -
 Decision 78 / 49 / EEC     , and in particular Articles 1 and 4 thereof ,
 Having regard to the Recommendation from the Commission ,
 Having regard to the Opinion of the Monetary Committee of 28 February 1978 ,
 Whereas Decision 78 / 49 / EEC made provision , in cases where one or more Member
 States which are creditors under the medium-term financial assistance system
 experience difficulties or are seriously threatened with difficulties as
 regards their balance of payments , for the mobilization of the claims held by
 such states ;     whereas it provided that one way of mobilizing the claims should
-be by refinancing from outside the system , either by concerted action by Membe
 States with other international organizations , or by an agreement made with
 such organizations ;                                                        •
 Whereas the Bank for International Settlements is the organization able to
 provide such refinancing ,
 HAS DECIDED AS     FOLLOWS   :
 ( 1 ) OJ No L 73 , 27.3.1971 , p. 15
  ( 2 ) OJ No L 14 , 18.1.1978 , p. 14
 ---pagebreak---                             Article 1
  1.    The Agreement in the form of an Exchange of Letters between the
  European Economic Community and the Bank for International Settlements
  concerning  the mobilisation of claims held by Member States under the
  machinery for medium-term financial assistance is hereby approved on
  behalf of the Community .
  2.    The text of the Exchange of Letters is annexed to this Decision .
                            Article 2
  The President of the Council is hereby authorized to designate the person
  empowered to sign the Agreement in the form of an Exchange of Letters in
  order to bind the Community .
, Done at Brussels .
                                                For the Council
                                               The Président
 ---pagebreak--- A.    Letter from the Community
^ ir '" ,   .                 . :
 1 have the honour to acknowledge receipt of your tetter of today 's date ,
which reads as follows :
" The BIS could conclude stand-by credit agreements with the creditor countries'
 central banks if they should so request .
These agreements could be concluded up to the total amount of the contribution
paid into the mechanism by the creditor country , with an overall limit of
 2 725 million units of 'account , corresponding to half of the total of future
 commitment ceilings of the member countries..'
 The practical–details of each stand-by agreement would be determined by agree­
 ment between the BIS and the central bank in question .       However , certain con­
 ditions , which the BIS would be prepared to apply , can be indicated already :
 The initial commitment of the BIS for each stand-by credit would be for two '
years with the option of renewal for other periods , the total not . to exceed -
 five years .                                                            _ ■
 On the opening of credits , and whenever they are renewed , the BIS would take a
 commission .    It would also be understood that , in order to allow.it to carry
 out the necessary adjustments to its own liquidity , the first drawings would
 not take place until one month after the conclusion of the stand-by agreement .
 Drawings would be in - the currencies available to the BIS at the time they were
 made , most probably . in US dollars ; they would be for periods to be . negoti ated
 in the light of J:he Bank 's resources , probably three or six months .       The con­
 ditions would be equivalent to those applied by the BIS at the time for trans^
 actions concluded on similar terms , i.e. at close to market rates .         Normally ,
 these rates should be only slightly above Libor .      However , if the BIS should
 itself have to have recourse to the market to procure the necessary funds , the
 rate applied could reach a maximum equivalent to Libor plus an appropriate           .
 margin .                                  /                    •_
 I would be grateful if you could inform me whether the Council of the European
 Communities is in agreement with the above ."
 I am pleased to inform you that the Council of the European Communities is in
 agreement with the contents of your letter .                                ,
 Please accept , Sir , the assurance of my highest consideration .
                                             For the Council of the European Communit
 Mr . Rene LARRE
 Director General of the
 Bank for International Settlements
  Centralbahnplatz 2
  CH-4002 BALE
 ---pagebreak--- B.    Letter from the Bank for International Settlements
Your Excellency ,
The BIS could conclude stand-by credit agreements with the creditor countries'
central banks if they should so request .-
These agreements could be concluded up to the total amount of the contribution
paid into the mechanism by the creditor country , with an overall limit of
2 725 million units of account , corresponding to half of the total of future
 commitment ceilings of the member countries .
The practical details of each stand-by agreement would be determined by agree­
ment between the BIS and the central bank in question .     However , certain con­
ditions , which the BIS would be prepared to apply , can be indicated already :
The initial commitment of the BIS for each stand-by credit would be for two
years with the option of renewal for other periods , the total not to exceed
f i ve years .
On the opening of credits , and whenever they are renewed , the BIS would take a
commission . . It would also be understood that , in order to allow it to carry
out the necessary adjustments to its own liquidity , the first drawings would
not take place until one month after the conclusion of the sta.nd-by agreement .
Drawings would be in the currencies available to the BIS at the time they were
made , most probably in US dollars ; they would be for periods to be negotiated
in the light of the Bank 's resources , probably three or six months .     The con­
ditions would be equivalent to those applied by . the BIS at the time for trans­
actions concluded on similar terms , i.e. at close to market rates .      Normally,
these rates should be only slightly above Libor .     However , if the BIS should
itself have to have recourse to the market to procure the necessary funds , the
rate applied could reach a maximum equivalent to Libor plus an appropriate
margin .                                          1                     .
I should be obliged if you would inform me whether the Council of the European
Communities is in agreement' with the above .
Please accept . Your Excel lency > the assurance of my highest consideration .
                                      For the Bank for International Settlements
Mr. K. B. ANDERSEN _
President of the Council
of the European Communities
rue> de la Loi , 170
BRUSSELS          '