Bank Deposit Insurance: Progress on the Law

The Costa Rican Legislative Assembly approved in first debate the bill that creates a deposit guarantee fund and resolution mechanisms for the banking system.

Wednesday, February 5, 2020

The objectives of the deposit guarantee are to protect depositors, particularly small ones, and to strengthen financial stability in the event of a bankruptcy of an intermediary, through timely payments to insured depositors and maintaining confidence in the financial intermediation system is critical to avoid bank runs and protect financial stability, the legislative body explained.

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Anabelle Ortega, executive director of the Chamber of Banks, told that "... The chamber agrees with the creation of a deposit guarantee fund, as this mechanism responds to the country's need for a deposit insurance mechanism that will give greater confidence and security to the financial system."

For Douglas Soto, general manager of the Bank of Costa Rica, it is important "... to guarantee the deposits of small savers. In the Assembly the project is being discussed, so we hope that the commission will define what the last version will be to express ourselves'."

From the Legislative Assembly's statement:

February 3rd, 2020. The deputies approved in first instance the file N° 21.717, Law of creation of the Deposit Guarantee Fund and resolution mechanisms.

Read full statment (In Spanish).

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