Change in Argentine Central Bank President Signals Clampdown on Active Financial 'Coup-Plotters'
October 3, 2014 • 7:47AM

With the Sept. 30 resignation of Argentine Central Bank (BCRA) Governor Juan Carlos Fabrega, and his replacement by Alejandro Vanoli, head of the National Securities Commission (CNV), Argentine President Cristina Fernandez de Kirchner has signaled her intention to clamp down on those domestic vultures engaged in financial speculation and warfare to destabilize the economy and her government—what Chief of Staff Jorge Capitanich referred to as "active coup-plotting."

Fabrega, a longtime fixture in the country's financial establishment, reportedly disapproved of the government's handling of the vulture fund crisis, and favored a currency devaluation. Vanoli, whose CNV has aggressively investigated financial crimes of foreign and domestic banks and corporations, is also an expert on debt issues and was one of the architects of the newly-created domestic capitals market.

In her forceful Sept. 30 speech at the Casa Rosada, Fernandez denounced the fact that sources within the BCRA had leaked "privileged information" to operators of the "caves"—a reference to the location of illegal black market transactions—warning them of impending government raids or monetary policy. She also criticized as ineffectual the BCRA's investigative capabilities and backlog of unresolved cases involving financial wrongdoing, dating back to the 1980s.

In his Oct. 1 press conference, Capitanich sharply warned: "The President's policy is clear: those who engage in illegal or speculative actions threatening macroeconomic stability will be quickly identified and punished, so as to guarantee monetary and macroeconomic stability for all Argentines." He also denounced those "exporters, monopolistic economic groups, stock market operatives, and media groups which are always on the affect the credibility of [Argentina's] institutions. This is active coup-plotting."

The shift in the BCRA Governor has provoked hysteria and threats from London and Wall Street mouthpieces who argue it spells disaster for Argentina's economy. In its Oct. 4 edition, the London Economist moaned about Fabrega's removal, warning it will worsen an economic crisis caused by the government's failure to "resolve its row with the holdout investors."

Then, in an undisguised threat, an executive for Moody's Investor Service, speaking in Buenos Aires on Thursday, warned that unless the government makes a deal with the vultures and devalues the currency, it will face catastrophe, because of the drop in foreign reserves—whose drop is in large part due to financial speculation, provoked capital flight, and the effects of the global financial crisis. According to, Gabriel Torres predicted there won't be enough foreign reserves to last into 2015, or to meet next year's $14 billion in debt obligations, which could then "cause a run by companies and individuals to demand dollars." Sooner or later, he said, "there will be a devaluation."

Argentina Tells U.S.: We're Based on the U.S. Presidential and Constitutional System—You Can't Legally Interfere in Our Affairs

Argentine President Cristina Fernandez is rubbing in the Obama administration's face the fact that her nation's system of government and Constitution are "practically a copy of the U.S. Constitution.... We have copied the United States' Presidential system, with the separation of the three branches," whose duties and responsibilities are defined by the Constitution, she said in her Sept. 30 speech.

In establishing a mechanism for paying the debt to bondholders through a new debt swap, she emphasized, the Argentine Congress has acted according to the responsibilities defined by the Constitution. The United States would never tolerate a foreign power dictating to it, telling it what its Congress can or cannot do. Why does the U.S. think it's acceptable for a U.S. court to dictate to a sovereign Argentina?

In a strongly-worded letter to Secretary of State John Kerry on Sept. 29, Argentine Ambassador to the U.S. Cecilia Nahon made the same point. Referencing the principle of the sovereign equality of states enshrined in the UN Charter, she asserted that "based on these principles, the Argentine Republic has adopted a system of government which is substantially similar to that of the United States of America, establishing a representative, republican and federal democracy. Its organs of political representation enjoy democratic legitimacy, grounded in the principle of the sovereignty of the people of the Argentine Republic." The Constitution also affirms, she said, that the Congress is empowered "to settle payment of the domestic and foreign debt of the nation."

Thus, she concluded, "the acts of these political organs are subject only to the sovereignty of the people and the rest of the principles set forth in the Argentine Constitution. In no case can they be questioned by the organs of any foreign State." Nahon warned that any attempt by U.S. courts to overturn Argentina's sovereign debt restructuring, or challenge actions of Argentine political organs, "would not only fall outside of the jurisdiction of said courts, but also be an unlawful interference in the domestic affairs of the Argentine Republic, triggering the international liability of the United States of America."