Reform of the Financial System

Allowing the opening of branches of foreign banks in the country and creating a structure of consolidated supervision of the entire financial system is part of the reform proposed by the Alvarado administration in Costa Rica.

Tuesday, April 30, 2019

In March of this year, two bills were presented to the Legislative Assembly, one of them seeks that foreign banks can open branches in Costa Rica and the other includes several changes to the Securities Market Regulatory Law.

See "Costa Rica: Flexibility for Foreign Banks"

In addition to the proposals already submitted so far this year, directors of the Economic Council reported that it is preparing the presentation of three bills that will focus on consolidated supervision, another on deposit insurance and bank resolution, and one more on financial consumer protection.

Economist Felix Delgado, who has participated in the financial reform process in the country since its inception, told that "... When we include the issues of deposit insurance and bank resolution, we are already talking about substantial things. Despite all that has been done in financial reform, it has not been possible to have a competitive banking system that lowers intermediation margins to international levels, although those margins have decreased substantially, although slowly in the last 30 years."

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Anabelle Ortega, Director of the Chamber of Banks, said they consider that "... the issues of the projects that the Government promotes are important and constitute a second impulse that comes to complement the reform of the 90's; although perhaps of a lesser impact and depth of the change that that generated in the Costa Rican Financial System'."

Both specialists agree that the projects are not known in depth because they are in the analysis phase, however, they consider the changes important for the financial sector.

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