Chavez Launches Banco del Sur

The presidents of Venezuela, Brazil, Argentina, Bolivia, Ecuador and Paraguay have launched Banco del Sur, the new South American development bank.

It is expected to have capital of about $7bn (€4.8bn, £3.4bn) and designed to promote integration by funding infrastructure and energy projects.

Uruguay's president, Tabaré Vázquez, was also expected to sign the founding treaty yesterday evening when he arrived in Buenos Aires to attend the inauguration, as was Argentina's president, Cristina Fernández. Colombia, however, has pulled out of the project, the brainchild of the Venezuela's President Hugo Chávez, and Chile has remained on the sidelines.

Finance ministers of the seven countries now have two months to translate the ideals into practice.

Venezuela and Brazil are expected to be the biggest contributors but how the funding will be shared, how the bank based in Caracas will operate, what projects it will finance, and who its president will be, have yet to be defined.

Critics say the new bank is an expensive waste of time given the presence of other multilateral lenders such as the IMF and World Bank, but its founders say it will help free the region from "imperial" domination.