With the aim of making the classification of debtors more flexible and reducing the risk of non-payment, in a context where delinquent loans keep on rising, Costa Rica authorized the modification of two regulations that apply to entities in the financial system.
The General Superintendence of Financial Entities (Sugef) and the National Council of Supervision of the Financial System (Conassif), informed that changes were made to the "Regulation for the qualification of debtors" and the "Regulation on management and evaluation of credit risk for the development banking system", which ultimately aim to give access to new credits to about 63 thousand people.
The Legislative Assembly has approved the absorption of Bancredito by Banco de Costa Rica, which must take on both the entity's assets and its obligations.
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.
An agreement was reached to extend for 90 days more the intervention of Banco Crédito Agrícola de Cartago, while discussion takes place of the plan that would allow its absorption by another banking entity.
The National Council of Supervision of the Financial System decided on May 22 to extend for three more months the intervention of Bancredito, whose status, according to the authorities, continues to be of "financial infeasibility".
In Costa Rica, the financial supervisor recommended the Congress to apply the state guarantee to Bancredito and merge it with another public banking entity.
Luis Carlos Delgado, president of the National Council of Supervision of the Financial System (Conassif), "...
While financial regulators want to increase the quality of banks' management with better qualified managers, a bill intends to reduce the demands of professionalism for a "popular" bank.
The intention of six members in reforming the Organic Law of the People's Bank (Banco Popular) and Community Development (BPCD) is to increase control of the union on the bank's management which is "... moving away from sound banking practices and is worrying not only from a point of view of financial supervision, but because it jeopardizes the savings of workers" according to the statement by the National Council of financial System supervision (Conassif) published by La Nacion.
In Costa Rica a proposal has been made to relax the rules on access to financial and stock markets in order to channel savings and local investment into public infrastructure.
An article on Nacion.com reports that "... A comprehensive reform of the stock market and financial regulation of the country aims to pave the way for funding of public and private infrastructure. "
The Central Bank of Costa Rica has submitted a query regarding the possibility of eliminating the restriction on financial institutions of varying its assets in dollars per day by up to 4% .
The Chamber of Banks looks favorably on the initiative to abolish the current limit of 4% so that more currencies can be bought and sold daily.
Changes to the rules of the 8204 Act include the classification of customers according to risk levels and the automation of anti-money laundering controls.
Tighter analysis of customers and better control of risk in lending are part of the changes that are being prepared by the financial regulator.
In 2013 the General Superintendence of Financial Entities (Sugef) began a process of regulatory changes for banks to continue during 2014. Tighter analysis of customers and better control of risk when granting loans are some of the changes being contemplated.
The Costa Rica Financial Supervisory Authority is proposing changes to the minimum number of investors required to keep a fund running.
The controversy generated on June 2 over the reduction of the minimum number of investors needed for investment funds led the regulatory authority of the financial market to propose a new change to the rules, with the difference being this time the moment of constitution of the fund from the operational stage.
An investigation is being carried out on the impact that changing the requirements for the composition of funds could have on tax revenues.
From a press release by the Ombudsman of Costa Rica:
The Ombudsman is investigating a decision by the National Financial System Supervision Council (Conassif) to amend the requirements for the composition of an investment fund changing from having an obligation to have 50 people to having only two natural or legal representatives for its creation.
Financial institutions in Costa Rica will have a maximum of 48 months to implement the new measures which restrict lending.
The information was confirmed by the National System for Financial Supervision (Conassif), which approved "11 new regulations, with a phased implementation period of up to 48 months, when the original version stipulated 36. Most of the grace periods start from 1 January 2014 ", reported Nacion.com.
Rules for providing housing to the middle class are being approved without adequate studies on their feasibility and functionality within the financial system.
Within the current drive in the search for housing solutions for the middle class sector, three projects have entered the legislative process.
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