Required Infrastructure (and Status):Legal (I) • Currently, argentine bankruptcy law does NOT allow netting and margining to take place, EXCEPT in the case of the Federal Government as a counterparty. • Thirty-some countries have already modified their Bankruptcy Laws to allow ISDA-style Master Agreement netting and margining, including Spain, Italy, France and Germany, jurisdictions traditionally dear to the argentine legal community for jurisprudence. • The Argentine Securities & Exchange Commission is sponsoring a Bankruptcy Law Reform Project for Derivatives to permit netting and margining for transactions booked under a master agreement. • The Bankruptcy Law Reform Project, once enacted, will merit clean netting and margining opinions, according to Cravath, Swaine & Moore, legal counsel to ISDA.

Required Infrastructure (and Status):Legal (II) • The Argentine Bankruptcy Law Reform Project has the support/approval of: • The Senate (Sanctioned in November 2000) • The Ministry of Economy • The Ministry of Justice • The Central Bank • The Buenos Aires Stock Exchange (Bolsa) • The Buenos Aires Securities Market (MerVal) • The Argentine Banking Association • ISDA - International Swaps & Derivatives Association • EMTA - Emerging Markets Association • The Argentine Bankruptcy Law Reform Project is currently pending final approval by the Congress(Cámara de Diputados), and... • Needs YOUR support !!

Required Infrastructure (and Status):Tax • Decree 1130/97 • An important milestone concerning the taxation of Derivatives in Argentina • Significantly reduces taxation uncertainty of Derivatives. • According to the IFA – International Fiscal Association, taxation of derivatives ought to be economically neutral.

Required Infrastructure (and Status):Accounting • Informe Area Contabilidad Nº 17 Argentine Accounting Standards Board (Federación Argentina del Consejo de Profesionales) • A modern, voluntary framework for derivatives accounting • Based on IASC – International Accounting Standards Committee Rule Nº 32 • Since November 1995 • Final, mandatory accounting framework by IVQ2001

Required Infrastructure (and Status):Financial Engineering and Operational • LIBOR-style Floating Rate Index (BAIBOR, Available!) • Non-Callable Government Bills and Bonds to build a Zero-Coupon Curve (BonTes and LeTes, Available!) • Electronic Trading Systems (MerVal SINAC and M.A.E. SIOPEL, Available!) • Money Transfer System (FedWire-style Central Bank MEP, Operational!) • Internationally well-connected communications networks

Regulatory Framework • Argentina permits the free flow of capital • Central Bank implements Basle Capital Adequacy Standards according to Interest Rate VAR • Argentine Securities and Exchange Commission regulates futures exchanges (Regulation Nº 337 of 1999, based on the U.S. Futures Industry Association’s Global Task Force’s Financial Integrity Recommendations)

Knowledge Management • Need for potential future competitors to cooperate in workgroups (“co-opetition”) to create the market they will later compete in • Training and Marketing are KEY to developing Argenmtina’s derivatives markets • For international banks, Head Office is a source of: • Experience • Initial staffing for local operations • Back-Office Technology for risk management and processing transactions • Customers must be educated and marketed before they will enter the Risk Management Business

Initially, the Basic Products! • FRA – Forward Rate Agreement • Interest Rate and Currency Swaps • Caps, Floors, Swaptions • Interest Rate and Government T-Bill and Bond Futures • The customer quote sheet shown is an example of what is already being done!

Potential Argentina Target Clients and Derivatives Uses • Commercial Banks (ALM-Asset and Liability Management, Reducing Imputed Capital) • Investment Banks (Structured Note Issues) • Commercial and Industrial Companies (Bond hedges, interest rate, exchange rate and commodity price risk management) • Insurance Companies (synthetic long term assets) • Pension Funds, Mutual Funds, Money Market Funds (interest rate and equity risk management products)

A Survey for You! • Are you interested in the development of financial derivatives for Argentina? Is your interest a career play? • Do you believe it’s possible to develop financial derivatives markets in Argentina? • Is it likely? This year? In 5 years? In 10+? • Do you have a client in Argentina that could benefit from derivatives and risk management? Do you have 5? Or 10+? • If you work for a foreign financial institution, does your Head Office trade derivatives? • If yes, could your Head Office provide you with information on the development of financial derivatives markets in comparable (Brazil, Spain, Italy, Australia) jurisdictions and help you develop a Business Plan? • Would you be willing to join a team to develop Argentina´s derivatives markets? • Would you participate in an ISDA Survey on this subject?

Your “To Do” List... • Organize marketing and educational conferences for your clients • Survey your clients’ risk management situation and needs • Use the BAIBOR Floating Rate Index for your floating rate operations • Analize the VaR inherent in your Balance Sheet and how you could reduce this risk, and BIS Imputed Capital, with the aid of FRAs. • Contact your Head Office Derivatives Team and develop a Business Plan • Support the Bankruptcy Law Reform and contact your Congressman • Support ISDA both financially and with your valuable time and expertise

Resources... • For Institutional Support...ISDA (www.isda.org), andADA – Argentine Derivatives Association (www.ada.org.ar) • For Professional Development...GARP – Global Association of Risk-Management Professionals (www.garp.com) • Build your Library...(Search www.amazon.com Books for “derivatives” - 765 items! – or “Risk Management” – 1,487 items!, most popular always listed first) • Search the Web...(The www.google.com search engine finds 7,300 pages with the keywords “derivatives risk management argentina”)

It´s Your Market! It´s Your Future!Rise to the Challenge!GetI-n-v-o-l-v-e-d!

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