Capitalization of the Costa Rica's Central Bank causes problems

For the promotors of the bill to capitalize the Central Bank of Costa Rica it will be necessary to reduce the costs that would be involved, especially since the market is in decline.

Monday, June 23, 2008


©image: www.bccr.fi.cr

Although the bill has only one objective, which is to provide more tools for controling inflation, the Costa Rican stock market does not appear to like what it sees.
The project, which was being studied by the Legislative Assembly's Commission of Financial Affairs, proposes a series of amendments to the laws that regulate the banking and securities markets.
One of the provisions that's upsetting the securities brokers is that the bank proposes to issue its commercial paper directly, a move that would eliminate broker commissions.

More on this topic

Costa Rican Central Bank seeks new powers

April 2008

Costa Rican legislators are calling on the administration of Oscar Arias to grant the Central Bank more regulatory powers.

Commercial banks remain wary of some of the proposed measures, such as one that would impose the minimum reserve requirement on Banco Popular.
Banco Popular opposes the restriction because of what it describes as the social content of much of its lending.

Capitalization of Costa Rica's Central Bank would cause distortions

April 2008

The Law of Capitalization of the Central Bank is being scrutinized by bankers and analysts, many of whom question the benefits attributed to it as an inflation-fighting mechanism.

From the Central Bank's point of view there is evidence that inflation is caused by three main structural factors: Central Bank losses, the exchange system, and distortions that impede the control of liquidity in Costa Rica.

Costa Rican Central Bank Bonds will be Sold Without Intermediaries

March 2009

Physical and legal investors can buy Monetary Stabilization Bonds without a seat in the exchange.

The Central Bank of Costa Rica proposed a change in monetary policy regulations, allowing any investor to purchase bonds issued directly by the body to regulate the money supply in the economy.

Panama: $30 Million for Banvivienda

December 2009

Grupo Mundial will enlarge the capital base of bank "Banco Banvivienda" for the second time in 2009.

In June, the group had injected $10 million in the bank.

Prensa.com reports: "...the purchase of 65% of Aseguradora Mundial on behalf of Spanish corporation Mapfre... implies a $102.7 million cash payment for the group, in additon to $4.5 million in dividends for 2009's operations, as well as 35% of Mapfre Central America".

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