Superpowers of Costa Rica's Central Bank create discrepancies

The regulations carried out by the Board of Directors of the National Supervision of the Financial System (Conassif) has a cost to Costa Ricans of about 9 billion colons. The resources come from the Central Bank and a charge on financial transactions.

Saturday, April 26, 2008

This expense is inflationary because the Central Bank issues money to cover the costss of the entities that are involved in the supervision and regulation of the financial system.
Currently 80 per cent of the budget of the superintendent's offices and of Conassif is financed by money from the Central Bank and 20 per cent from fees of groups being regulated.

More on this topic

Panama Celebrates 108 Years Without a Central Bank

July 2011

There has been more than a century without salaries, offices and staff travel expenses, while politicians have been forced to control costs, having no one else to cover the deficit by printing money.

Economist Quijano Diego Duran celebrates the anniversary with an article in Prensa.com, outlining the advantages Panama has had over other countries in the area, from lacking of a central bank.

Central Bank: Big Brother

April 2010

As in Orwell’s fable, Central Banks assume the task of deciding who, among equals, “is more equal than others”.

Paul Laurent Solís analyzed the anathema that has become the label “tax haven”, and remarked the role Central Banks have assumed in Central American economies, especially when they become tools for whichever government that happens to be in power.

Capitalization of Costa Rica's Central Bank would cause distortions

April 2008

The Law of Capitalization of the Central Bank is being scrutinized by bankers and analysts, many of whom question the benefits attributed to it as an inflation-fighting mechanism.

From the Central Bank's point of view there is evidence that inflation is caused by three main structural factors: Central Bank losses, the exchange system, and distortions that impede the control of liquidity in Costa Rica.

Costa Rican Central Bank seeks new powers

April 2008

Costa Rican legislators are calling on the administration of Oscar Arias to grant the Central Bank more regulatory powers.

Commercial banks remain wary of some of the proposed measures, such as one that would impose the minimum reserve requirement on Banco Popular.
Banco Popular opposes the restriction because of what it describes as the social content of much of its lending.

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