Region Takes Measures Against Global Crisis

Central America and the Dominican Republic have agreed together to ensure financial liquidity, create mechanisms for monitoring risk management and financial systems, as well as taking measures against the effects of the euro zone crisis and the weakness of U.S.

Monday, February 20, 2012

Carlos Acevedo, president of the Central Reserve Bank of El Salvador, told that "we are preparing a regional financial system and shielding mechanisms."

Among some preventive macroeconomic measures that Acevedo mentioned is managing financial liquidity to ensure that international shocks have no effect on financial flows to banks. "What we want to avoid is banks which are solvent going bankrupt due to a temporary problem of illiquidity in the region", he said.

Assistance programs with the International Monetary Fund (IMF), lines of credit with the Latin American Reserve Fund and other international financial organizations, are other "shields" mentioned by Edgar Barquin, president of the Bank of Guatemala (Banguat).

"If the crisis in the euro area deepens and hits the United States, the effects will be transmitted via the flows to the region, especially in foreign credit lines to the financial system, foreign investment, trade, tourism and remittances," he said.

This agreement was made during the 263rd meeting of Central American Monetary Council (CMCA).

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