The Superintendency of Banks has approved the Agreement No.4-2013, which establishes rules on the management and administration of credit risk.
From a statement from the Superintendency of Banks:
New agreement strengthens administration and credit risk management
The Board of Directors of the Superintendence of Banks approved Agreement No. 4-2013, which establishes rules on the management and administration of credit risk.
The Sugef in Costa Rica has demanded tighter controls on banks when lending in dollars.
As part of the measures proposed by the Superintendent of Financial Institutions (Sugef), financial institutions must conduct a capacity analysis on the borrower, as well as requiring collateral and credit history, a test now only done when the loan is for more than $130,000.
A dozen medicine suppliers plan to close operations because of the considerable delays in payment for services by the government of El Salvador.
"At least 12 companies, including medium and small sized ones, are planning to close operations in the remainder of this year due to a lack of working capital because of the government defaults that are already half a year late.
The Superintendency of Banks in Panama is keeping a list containing names of companies that are not authorized to perform private banking or trust activities.
Current investigations into the company Pronto Cash has brought to the fore the risk of financial fraud by companies which are not controlled by the Superintendency of Banks.
An article in Panamaamerica.com states that "The latest company to be cited in a warning by the Superintendency of Bank is the financing firm Pronto Cash. The banking sector regulator said the finance company 'is not allowed to collect, in or from Panama, directly or indirectly money from the public by accepting deposits or in any other form. '"
The ratings agency Standard & Poor's has maintained the sovereign credit rating of El Salvador at BB-/ B local and in terms of foreign exchange, reported a stable outlook.
The report notes, "The Government's commitment to fiscal and macroeconomic stability is consistent with the ratings, despite mediocre economic growth and limited fiscal and monetary flexibility."
A bill entitled "Law on Regulation of Information Services on People’s Credit History" will become effective on October 25
The new law regulates credit bureaus that provide citizens credit information, enabling greater access to credit records.
In order to deal with complaints by citizens about out of date information, the new law requires the offices providing credit data update their databases every month.
Standard & Poor's downgraded the country's rating to "BB-" from "BB" with an overall picture of "stable”.
Reuters reports part of the S&P statement "The downgrade reflects Standard & Poor's view that political climate is deteriorating due to the growing division between president Mauricio Funes and the FMLN."
The rating agency stated that the next presidential election in 2012 may contribute to exacerbate political tensions which exist today and stop pending reforms.
Principal and interests will be guaranteed through a contigency loan granted by the Central American Bank for Economic Integration to the issuing company.
“Partial Credit Guarantees” is the name of the project that CABEI is preparing to assist companies in accessing regulated capital markets in the Bank's member states.
David Castillo's article at Capitales.com, points that "the plan is similar to a Stand By Credit Letter or Safe Credit Letter.
By October it is anticipated that the law will be approved after seven years in the National Assembly.
Freddy Torres, member of the National Assembly's economy committee, indicated that progress had been made, adding that they are awaiting a final review by a Peruvian microfinance expert before sending it for approval by the Assembly.
"We have reached several conclusions, one of which is that micro-finance companies are going to be regulated by the banking regulator," he told Laprensa.com.ni.
The "No Payment" movement is scaring US and European investors, threatening the arrival of $70 million worth of funds for micro finance companies.
"In the last Central American Microfinance Conference the challenges and opportunities faced by the sector were discussed and the Guatemalan moderator, Reynold Walter, concluded by highlighting that governments should discourage 'no payment' movements, which received a round of applause from the attendees.
Moody's Investors Service on Wednesday upgraded Panama's sovereign ratings to investment grade of Baa3 from Ba1.
The change is based on a significant improvement in the country's fiscal and debt positions.
"The anticipated positive impact of fiscal policy initiatives on government accounts and prospects for sustained economic growth are at the core of the upgrade," said Alessandra Alecci, Moody's vice president and senior analyst.
Standard & Poor’s rated Panama as investment grade; Fitch did the same two months ago.
The risk rating agency raised Panama's long-term foreign- and local-currency sovereign credit ratings to “BBB-” from “BB+”.
"The upgrade reflects our assessment that continued economic growth--combined with moderate fiscal deficits--should reduce the government's debt burden and maintain its financial profile comfortably in line with that of other sovereigns in the 'BBB' rating category," said S&P credit analyst Roberto Sifon-Arevalo. The outlook on Panama is stable.
Representatives from Standard & Poor’s and Moody’s will visit Panama to meet with government authorities and private sector representatives.
Authorities will first meet with Standard & Poor’s delegates, and on May 25 they will do the same with Moody’s executives.
“With S&P they will discuss how to take the Panamanian case up to the central rating committee and trying to improve the country’s current rating of BB+ Positive”, reported Laestrella.com.pa.
At the end of February the loan portfolio of Salvadoran banks was 4.6% smaller than the same month of 2009.
In February 2010 banks had a combined loan portfolio of $8.09 billion, down from $8.47 billion in February 2009.
Claudio de Rosa is the former CEO of ABANSA, the Association of Salvadoran Banks. He told Elsalvador.com: “this sharp reduction in credit to private individuals and companies is a result of less demand and lack of confidence, in addition to lower remittances, higher unemployment and less exports”.