BUENOS AIRES, Dec 7: Latin American leaders on Sunday inaugurate the Bank of the South, the brainchild of Venezuela’s President Hugo Chavez, who hopes it will help wean the region off institutions like the IMF.

Six South American presidents are scheduled to gather in Buenos Aires on Sunday to formally launch the bank, which will be headquartered in Caracas.

The creation of the regional bank comes amid a widespread perception in South America that adjustment policies imposed by multinational credit agencies have failed.

The bank, which will start operations in 2008 with an initial capital of $7 billion, is designed to support regional development and integration projects.

Venezuela’s Finance Minister Rodrigo Cabezas acknowledged last week there are still differences as to how much each member should contribute to the bank.

“The discussion is whether the entity will take into account the differences in economic weight of the nations,” an Argentine official said.

Cabezas said a number of other issues still had to be fine-tuned, including the composition of the directors and how top executives will be picked.

The initiative to create the bank was born in 2006, and the project dreamed up by Chavez gradually gained popularity in the region.

Several of the governments that joined the project do not share the ideology of the leftist Venezuelan president. What they do have in common is the rejection of what they consider the negative influence by the International Monetary Fund and the World Bank.

“The bank will finance public and private projects. It will not participate in projects in countries outside the region. It is directed to South America,” said Brazil’s Economy Minister Guido Mantega.—AFP