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.
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.
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 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.
From February 2016 the banking union will publish an interbank rate that will serve as reference for the calculation of interest rates for loans in colones.
The Chamber of Banking and Financial Institutions plans to hire an independent firm to perform the calculation of the indicator, which will begin to be published in February 2016. The union argues that although there is a passive base rate, which is used as a reference for credit operations and investments, in other markets it is independent third parties which calculate such indicators.
If the Treasury's proposal succeeds, interest on bank deposits would incur 8% to 15%, while for revenues generated by mutual funds, the tax would rise from 5% to 15%.
This unification is due to the fact that currently there are different taxes for similar types of income, therefore the tax is not neutral, according to the CEO of Taxation. In the case of surplus cooperatives and solidarity associations, the project proposes "...
In Costa Rica, institutions are promoting banking and financial education to increase use of services.
Buying and selling shares in the markets and learning about what goes on in a bank are some of the activities that can be done online thanks to the efforts of organizations like the National Stock Exchange and the Superintendency of Securities.
These two institutions and the Costa Rican Chamber of banks are promoting financial education in the country through interactive programs that can be accessed on the internet.
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.
According to an article in Nacion.com, "The insurance will cover up to a certain amount of money in savings accounts.
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