Guatemala: Investment Rules for Banks

Guatemalan banks are now allowed to invest in securities issued by private domestic firms in the foreign market.

Friday, February 7, 2014

The Monetary Board (JM) has approved an amendment to an article of the Regulations of the Law on Banks and Financial Groups, allowing banks to invest in corporate bonds that are issued by national companies and which are traded in foreign markets.

"The conditions for acquiring licenses in the stock market is that the documents must have a BB certification or higher by the rating agency Fitch. It was also asked that they be traded on the market regulated by the authorities of the countries where they operate. "

"The decision attempts to make the banks look for ways to invest their funds and diversify their portfolios, and that corresponds to international offers containing information provided by listed companies being complete and reflecting solvency," said Edgar Barquín, president of the JM.

Carlos Gonzalez, an analyst at the Association for Research and Social Studies (ASIES), explained that "it is a novel measure because in the past investments were the responsibility of offshore banks and risks were not calculated. Now it is positive because the world is globalized. "

More on this topic

Central Bank Intervenes Quetzal

January 2018

In a new attempt to minimize the downward trend registered in the price of the local currency against the dollar, Banco de Guatemala will intervene in the exchange market buying $500 million.

The exchange rate of the Quetzal with respect to the US Dollar has trended downwards since January 2010, when the Quetzal was quoted at Q8.40, falling to Q7.34, according to the latest record available in January 2018. The new measure that is being implemented from today, involves carrying out auctions on the foreign exchange market every Friday, of $50 million each, until a total amount of $500 million has been spent.   

More Power for Superintendency of Banks in Guatemala

April 2013

The amendments to the Law on Banks and Financial Groups, which provide greater control for the country's financial system, are now in effect.

"One of the most important reforms is that the Superintendency of Banks (SIB), has the power to limit banks, finance companies and offshore entities in the distribution of dividends," noted an article in Prensalibre.com .

Guatemala: New Rules for Forex Trading

October 2010

Starting January 2011, cash transactions exceeding $ 3000 must meet additional requirements

The chairman of the Monetary Board (JM), Edgar Barquin said that transactions of less than $ 3 thousand only require name, identification and legal address.

For amounts over the $ 3,000 more information will be requested and the operation must be guaranteed by a bank official.

Guatemalan Banks to Cover Currency Exchange Risk

December 2009

Banks in Guatemala will have to increase their capital from 10% to 14% when granting loans in U.S. dollars to people with incomes in quetzales.

Banking Superintendent Edgar Barquín explained that the measure, which affects a third of the entire loan portfolio in dollars -$982 million-, will force banks in the system to increase their capital in $48 million.

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