Banking liquidity (money) credit-crunch financial crisis banking system Central Bank of Honduras Central Reserve Bank of El Salvador Reserve requirements Salvadorean Banking Association Banking crisis Central Banking banking reserves credit risk loans Annual results and outlook

"We Cannot Lend Money Senselessly"

The Central Bank of Honduras is pressuring bankers to enlarge their credit portfolios, but banks are resisting any change to their risk policies.

Thursday, February 19, 2009

©image: Paul Falardeau

In statements in La Tribuna, the well-known banker, Jorge Bueso Arias, insisted that "it is not that [the Central Bank] wants to put forth mandates, but rather... it wants that we increase our credit portfolio, and I have said publicly that our main responsibility is to our depositors,... and we cannot begin to 'to lend senselessly' to anyone that comes in requesting credit without taking the measures that banking prudence implies...”

Source: latribuna.hn

Key entities

Jorge Bueso Arias Central Bank of Honduras

Countries

Honduras

Insight

banking reserves liquidity (money) Reserve requirements credit risk Banking crisis financial crisis credit-crunch loans Banking

$500 million for Salvadoran financial sector

November 2008

In an unprecedented move since the dollarization of the country's economy, the BCR will inject ready money into the local financial sector.

The IDB approved an operation for the Central Reserve Bank to buy a credit portfolio totalling $500 million from banks giving them more liquidity to support the production sector.

Salvadoran Banks ask for lower credit rate from the IDB

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ABANSA believes that the cost of accessing the $500 million made available with IDB funds is too high.

Armando Arias, president of the group said that the rate of the funds corresponds to the LIBOR plus 400 base points more in commissions and is practically the same as the rates offered by other international lenders.

El Salvador needs $1 billion to deal with the crisis

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This is the amount that the Salvadoran Foundation for Social and Economic Development recommends getting in the contingency credit.

According to a report published yesterday by the foundation "we must urge the Central Reserve (BCR) to negotiate a contingency fund of $1 billion from the IMF, making use of the new line of credit that the Bank has opened.

BCIE approves $500 million for the region

November 2008

The regional financial entity revealed that the money will be handed over to the central banks to ease liquidity problems.

Details of the emergency program will be presented next Wednesday, November 19; however, Nick Rischbieth said that the $500 million will be divided in two lines of credit: one for liquidity and one for emergency.

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