In its next evaluation, the OECD could lower Guatemala's rating, because in August last year access to bank information with a court order was suspended, which could lead to an increase in the credit price.
From May 2019, foreign customers will have to declare to local system banks that their funds meet their country's tax requirements.
The Superintendence of Banks of Panama (SBP) approved Agreement 02-2019, which implements the recommendations of the Financial Action Task Force, which consists of expanding the required due diligence measures of banks with their customers.
In response to rumors of more interventions into financial institutions, the Superintendency of Banks in Panama says that they are unfounded, highlighting the strength of the banking system.
From a statement issued by the Superintendency of Banks of Panama:
The Superintendency of Banks in Panama made public knowledge, that as a result of taking operational and administrative control of Balboa Bank & Trust and its subsidiaries a number of comments and news stories have arisen which do not have any foundation regarding future actions that may be taken by this institution on other banks, or conditions of vulnerability of some institutions in our banking system.
The Monetary Board has issued regulations governing the registration of local rating agencies, and the requirement for all financial institutions to be qualified.
In addition the Monetary Board (MB), published the regulation on Concentration in Contingencies and Investments as well as issues related to the operating permits for offshore entities, regulations that are part of the changes made to the Banking Act and financial groups that were in effect before April 1.
Rating agencies registration is now mandatory and banking institutions must be rated by one of them.
Rating agencies will have to submit their paperwork to the Superintendency of Banks (SIB). According to the chairman of the Monetary Board (JM) and the Bank of Guatemala (Banguat), Edgar Barquin, "among the amendments to the Law on Banks and Financial Groups is the addition that now banks must have a risk rating" .
Guatemala's monetary authority (Junta Monetaria - JM), passed new regulations by which retirement funds at non-banking financial entities can now be transferred to banks.
The JM ruled this in its latest resolution, named 14-2010.
They explained that investors must approve the transference, and once in a bank, "the funds will be protected by FOPA (a fund protecting savings)".
Banks in Guatemala will have to increase their capital from 10% to 14% when granting loans in U.S. dollars to people with incomes in quetzales.
Banking Superintendent Edgar Barquín explained that the measure, which affects a third of the entire loan portfolio in dollars -$982 million-, will force banks in the system to increase their capital in $48 million.
Since yesterday financial groups offering loans will be required to have reserves that equal 100% of the expired credits portfolio.
According to prensalibre.com, "In order to achieve this, generic reserves have been established to support current (specific) requests.
Banks should have reserves representing a percentage based on the last accrued months of portfolio, which range from 5% for a 30-day accrual and up to three month, and 100% for more than a year."
Tomorrow the Superintendence of Banks (SIB) will request that the Monetary Board approve a modification of the Regulations for Credit Risk Management.
Even though bank portfolios in arrears are not at a critical level, the SIB will request that the Monetary Board make the changes to the rules in order for banks to increase their reserves for bad debts (loans).