Guatemalan bank reserves increased

Since yesterday financial groups offering loans will be required to have reserves that equal 100% of the expired credits portfolio.

Tuesday, January 6, 2009

According to prensalibre.com, "In order to achieve this, generic reserves have been established to support current (specific) requests.

Banks should have reserves representing a percentage based on the last accrued months of portfolio, which range from 5% for a 30-day accrual and up to three month, and 100% for more than a year."

More on this topic

Modification to Banking Regulations in Guatemala

December 2008

Tomorrow the Superintendence of Banks (SIB) will request that the Monetary Board approve a modification of the Regulations for Credit Risk Management.

Even though bank portfolios in arrears are not at a critical level, the SIB will request that the Monetary Board make the changes to the rules in order for banks to increase their reserves for bad debts (loans).

Hostile Outlook for Central American Banking

September 2016

Moody's warns of the risks faced by banks in Central America in the context of a rising trend in interest rates and dollarization of their loan portfolios.

From a report by Moody's:

Mexico, September 14, 2016 -- Banks in Central America face rising asset risks as interest rates look set to rise in the region, pushing up debt service costs for borrowers, according to a report from Moody's Investors Service. 

"We Cannot Lend Money Senselessly"

February 2009

The Central Bank of Honduras is pressuring bankers to enlarge their credit portfolios, but banks are resisting any change to their risk policies.

In statements in La Tribuna, the well-known banker, Jorge Bueso Arias, insisted that "it is not that [the Central Bank] wants to put forth mandates, but rather...

Guatemala: More Controls On Banks

September 2016

A bill being promoted by the executive branch seeks to authorize the Bank of Guatemala to finance the capitalization of a bank when it faces problems affecting financial stability.

The aim of this initiative is to adapt the rules on financial supervision and risk control to international standards, to prevent the stability of the domestic financial system from being affected when a bank has liquidity or solvency problems.

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