South American States set up IMF-like bank

The FINANCIAL — According to APA-Economics, Seven South American countries have founded a development bank as an alternative source of funds to the International Monetary Fund.

The presidents of Argentina, Bolivia, Brazil, Ecuador, Paraguay and Venezuela, and a representative of Uruguay, signed the "founding agreement" on December 9 at a ceremony, Reuters reported. The Banco del Sur, or Bank of the South, is to be funded with $7 billion, the bulk of which will come from Brazil and Venezuela.

The bank is to have functions similar to the IMF.

The idea was first put forward by Venezuelan President Hugo Chavez in 2006 when he said his country will leave the World Bank and IMF in 2007.

The Caracas-based body will have arms in Argentina and Bolivia.