BUENOS AIRES, Argentina (AP) - Hugo Chavez and six other Latin American leaders are launching a regional development bank Sunday that the Venezuelan leader is touting as South America's answer to U.S.-influenced international lenders.

With startup capital expected at up to $7 billion, backers say the Banco del Sur, or Bank of the South, will offer Latin American countries loans with fewer strings attached than those proffered by the World Bank, the International Monetary Fund or the Inter-American Development Bank.

''The Bank of the South is a strategy ... aimed at freeing us from the chains of dependence and underdevelopment,'' Chavez said upon arriving Sunday in the Argentine capital for the signing ceremony.

The bank is one of several far-reaching proposals under Chavez's ambitious call to unite a bloc of Latin American countries in a ''confederation of republics.'' His vision also includes a transcontinental natural gas pipeline and trade alliances.

Critics note much remains to be determined about how the bank will operate. They say it might turn out to be a largely symbolic project used by Chavez to spread his oil-financed influence.

But others call the bank a bold stroke for Latin America's financial independence.

''What you had in the past decade was the collapse of a very powerful creditor's cartel headed by the IMF,'' said Mark Weisbrot of the Washington-based Center for Economic and Policy Research. ''This is the first step in creating an alternative.''

Finance ministers of Brazil, Venezuela, Bolivia, Uruguay, Paraguay, Argentina and Ecuador will sit on the bank's board. Officials say it will dispense loans for projects ranging from road-building to anti-poverty programs and regional integration plans such as cross-border rail lines.

Rodolfo Sanz, a Venezuelan state bank official, said capitalization is expected between $5 billion and $7 billion _ depending on final pledges. Venezuelan officials say loans will be issued at interest rates similar to other international lenders.

''The bank is not against anything or anyone. It is in favor of the people of South America,'' Venezuelan Finance Minister Rodrigo Cabezas said when Brazil, the largest economy in South American, committed to joining the enterprise.

He said the bank will seek to replace ''traditional functions of the World Bank and International Monetary Fund in the region and their obsolete operating statutes.''

The bank will be headquartered in Caracas, with Bolivian and Argentine branches.

Augusto de la Torre, World Bank chief economist for Latin America, said the bank is welcome.

''It's a very interesting initiative which I think expresses the desire to find stronger cooperation between Latin American governments,'' he told The Associated Press in a recent interview. ''As far as the World Bank is concerned, this new initiative is not perceived as a competitor.''

IMF-watcher Paul Blustein at Washington's Brookings Institution said the project highlights Latin America's yearning for greater autonomy after decades of sporadic financial crises and imposed austerity measures - such as IMF missteps ahead of Argentina's 2002 economic meltdown.

''It's really emblematic of how Latin America has become disillusioned with the model that the IMF and the World Bank and the U.S. Treasury promotes - the so-called Washington consensus,'' he said.

But he noted the IMF and World Bank have decades of know-how.

''I'm not so sure this institution is going to be any more successful,'' he said.