Bankers Who Don't Understand their Business?

The presidents of Costa Rican state banks said they "do not know why they are paying higher fees" than those paid by private banks.

Tuesday, October 30, 2012

EDITORIAL

The phenomenon of the nerve with which too many Latin American officials are flaunting their irresponsibility is increasing.

Television pictures showed a formal meeting chaired by the Chief Executive of Costa Rica, President Chinchilla, accompanied by her Vice-Minister of Finance, Central Bank President and other members of the economic team, and presidents and directors of the three main public banks in the country, the Banco Nacional, Banco de Costa Rica and Banco Popular.

The purpose of the meeting was to analyze the high interest rates prevailing in Costa Rica, and particularly, the fact that interest rates of state-owned commercial banks are higher than those of private banks.

This public meeting, of those primarily responsible for the financial aspects of the Costa Rican economy, and who should await the government’s decision, culminated in the manifestation of the blatant irresponsibility chanted by the presidents of the state banks, who according to vice Liberman "know that the rate they are paying is higher than private banks, but what they do not know is why."

These public servant managers of state bank, who earn tens of thousands of dollars a month, who are elected to office for their supposed knowledge and skills, declared that they were unaware of fundamental facts, not only about the institutions that they supposedly manage, but also about the economy of the citizens they supposedly serve.



More on this topic

Costa Rica: Efforts to Lower Interest Rates

January 2013

Managers of large Costa Rican public institutions are coordinating actions with government officials and state banks.

According to an article in Elfinancierocr.com, the meeting held on Monday 14 January is part of a consultation strategy that President Chinchilla is conducting in order to find the best way to control speculative capital inflows.

Costa Rica: Interest Rates Too "Fat"

November 2012

After a warning by President Chinchilla to state commercial banks, the financial entities involved have put their interest rates on a diet.

The passive base rate, an index calculated by the Central Bank of Costa Rica (BCCR), is a weighted average of the interest rates in colones on gross savings, negotiated by financial intermediaries resident in the country and the interest rates of collection instruments of the Central Bank and Ministry of Finance negotiated both in the primary and secondary market, each corresponding to periods of between 150 and 210 days.

State Banking Responsible for High Interest Rates

October 2012

The President of Costa Rica Laura Chinchilla criticized state-owned commercial banks for being directly responsible for the high interest rates plaguing the economy.

Nacion.com reports that "President Laura Chinchilla said yesterday that Costa Rican public banks "are over stepping their hand" with interest rates in colones which are hitting Costa Rican’s wallets."

Basic Rate Up 0.75% in Costa rica

July 2009

The Basic Passive Rate now stands at 12.75%, highest value recorded in 2009.

This increase would be partially in response to state banks raising savings rates.

"Since July 1st, the average interest rate for 180 days deposits paid by Banco Nacional, Banco Popular and Banco de Costa Rica raised 180 basis points, reaching 10.13%", states an article in Elfinancierocr.com.

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