Guatemala has too many banks, too many bank failures

Guatemala's banks are born and die more fequently that is desirable for a solid, stable and reliable banking system, says Carlos Mendoza.

Monday, July 14, 2008

Writing in The Black Box, a blog focusing on the Guatemala economy, Mendoza says Guatemala has too many banks, and too many of them fail.
According to the Bankers Association of Guatemala, on Aug. 25, 1991 there were 23 private and state banks (excluding the Central Bank) and seven financiers. Now, there are 21 banks and 17 financial societies.
For someone who doesn't know the recent history of the banking system, the first thing they will notice is the growth in the number of financial societies.
However, Mendoza says, what's more important is that many banks have come and gone over this period, with the result that the system is weaker and less stable than it should be.

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