RAFAEL CALDERA
PRESIDENT OF THE REPUBLIC

In use of the powers derived from the Decree Number 241 dated 27 June 1994, published in the Official Gazette of the Republic of Venezuela in the same date, in Council of Ministers. Taking into accounts:

That the significance of the crisis that affects the financial system requires the adoption by the national Executive of extraordinary measures to correct the irregularities observed and to reestablish the normal functioning of the system,

Taking into account:

That is necessary to unify the direction and control by the State of the policies and the measure that will allow the reestablishment of the financial system stability,

Taking into account:

That the State, by assuring the operative soundness of the national financial system, in securing the safeness of the bank deposits and those of other financial institution,

DECREES THE FOLLOWING RULES TO GUARANTEE THE STABILITY OF THE FINANCIAL, SYSTEM AND TO PROTECT THE DEPOSITORS

ARTICLE 1 : To face the f financial emergency, a Panel is created that will be the maximum authority of the financial system, and which will be chaired by the Minister of Finance and composed of the President of the Banco Central de Venezuela, the President of Fondo de Garantia de Depositos y Proteccion Bancaria (FOGADE), the Superintendent of Banks and three members designated by the President of the Republic, one of whom will act as Executive Director of this Panel. The decisions of the Panel will be taken by majority.

ARTICLE 2 : The Financial Emergency Panel will be entrusted with all the powers conferred upon to the "Consejo Superior de la Superintendencia de Bancos y Otras Instituciones Financieras", all the decision where the law require previous opinion from Banco Central de Venezuela, as well as the approval of any other measu re applicable for the solution of the financial emergency.

ARTICLE 3 : The Financial Emergency panel will establish a special supervision and control regime- which the financial lnstitutions must follow. For that purpose, the Panel can modify the lap ses foreseen by the General Law on Banks and Other Financial Institutions to adjust to the rules of that law.

ARTICLE 4 : Financial lnstitutions that do not fulfill the regime established according to article 3, wi11 be subject to the rules imposed by the Financial Emergency Panel, which can include, in addition to those established in the law, the removal of some or all the directors or managers of each financial group; the acquisition of shares by the State, the suspension or repeal of authorization to operate, the appointment of an official to oversee and to ensure the fulfillment of the rules adopted by the Panel. This official will be present at the board of directors and its committees meetings with the right to veto, and can proceed to hire consulting and auditing firms whenever he deems it appropriate. The financial institutions must make available to this official at his request all documents, books, and any other information necessary for the fulfillment of his functions.

ARTICLE 5: The Financial Emergency Panel can subscribe cooperation agreements with other public sector bodies to attend it purposes.

ARTICLE 6 : Financial lnstitutions must recirculate funds obtained from depositors into other financial institutions following instructions from the Panel. These funds will be guaranteed by the Republic. In order to comply with the goals of this article, the Panel will determine the appropriate mechanisms. The institution receiving funds through this mechanism from other financial institutions, will have an official with the same faculties mentioned in the article 4, whom will be designated by the Panel.

ARTICLE 7: During the period of emergency, Banco Central de Venezu ela can provide the necessary liquidity assistance to Fondo de Garantia de Depository Protection Bancarla and to financial institutions subject to the special supervision and control regime referred to in article-- 3 and 4, to ensure the functioning of these financial institutions and the stability of the financial system. In the sense, Banco Central de Venezuela will give financial assistance in the terms and conditions established by its Board of Directors. This assistance can only be given to financial institutions under the exceptional regime enacted in the present decree.

ARTICLE 8: Members of the Panel will only be accountable for those acts executed in bad bad faith or with the purpose of obtaining personal benefits or for a third person.

ARTICLE 9: The Financial Emergency Panel will have the power to re gulate the inter-Bank market and can use the available funds on that market to service the financial emergency.