Bank Deposit Insurance in Costa Rica (2)

The Chamber of Banking and Financial Institutions has suggested to Parliament members that they establish 5% a year on insurable savings and not on all savings.

Thursday, March 1, 2012

A statement from the Legislative Assembly reads:

Project seeks to safeguard money belonging to small savers

The members of the Standing Committee Meeting of Economic Affairs today received representatives from the Chamber of Banking and Financial Institutions in order to discuss the deposit insurance project and banking resolution.

The participants considered that overall the project is good, but there are some aspects that require modifications in order to better achieve the objectives that have been set.

The sole purpose of savings deposit insurance is to provide cover in the event of insolvency of a financial institution, but according to international experiences it is not able to cover 100% of them.

As indicated by Anabelle Ortega, representative of the Chamber of Banking it is necessary to amend Article 2 of the draft law so as to establish the technical parameters to set the individual risk and establish a rate of 5% a year on insurable deposits and not on the entirety of the deposits.

Also to set a time scale for the National Financial System Supervision, CONASSIF, to regulate and define the methodology and delete the paragraph on advanced contributions .

More on this topic

Bank Deposit Insurance: Progress on the Law

February 2020

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

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.

The Importance of Deposit Insurance

March 2012

The recent financial crisis demonstrates the importance of systems that provide guarantees on bank savings deposits, giving strength and security to the financial system.

An analysis of the topic by economist Roland J. Sevilla Boza, Chairman of the Deposit Guarantee Fund of Financial Institutions (FOGADE), focuses on news about Nicaragua, but the concepts generally can be extrapolated to the whole region.

Bank Deposit Insurance in Costa Rica

February 2012

The Costa Rican Banking Association has made several suggestions to Members on a draft law for the system of deposit insurance and bank resolution.

The President of the Costa Rican Banking Association (ABC), Gerardo Corrales presented to the members of the Standing Committee on Economic Affairs a draft system for deposit insurance and bank resolution.

Private Banking to Pay for Deposit Insurance

June 2009

Private banks in Costa Rica will start a deposit insurance fund, according to the volume of captured money.

The Central Bank of Costa Rica is developing a bill that it aims to send to the Assembly before 2010 to establish a deposit insurance fund, which will pay customers part of their deposits in case the bank goes under.