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.
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 Nacion.com 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."
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.
After the Nicaraguan Assembly approved a bill that forces local banks to allow public officials sanctioned by OFAC to have an account, there are fears that the country will be isolated from the international financial system.
A statement issued by the National Assembly on February 3 explains that the deputies approved the Law Initiative of Reform and Addition to the Law for the Protection of the Rights of Consumers and Users, a legislative project which guarantees a better and greater protection of the rights of consumers and users in the access to goods and services as a human right recognized by the Nicaraguan State.
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.
In order to try to stop the deceleration in the issue of loans in dollars, authorities in Costa Rica have decided to soften the rules required of banks who grant loans in this currency.
The National Council of Supervision of the Financial System (Conassif) has decided to temporarily reverse the stricter measures that banks must comply with when granting loans in foreign currency to those who generate income in Colones, with the aim of counteracting the deceleration that has been seen in the issue of bank loans.
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.
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