Bankers in Costa Rica are digesting what many see as unwelcome
Costa Rica | Banking Sector: Holding steady
Costa Rican banks are confronting tighter credit controls as authorities grapple with an explosion in dollar lending. The central bank insists such moves are a necessary evil
In February, the central bank slapped restrictions on the
growth of their credit portfolios. At the same time, SUGEF, the
banking regulator, is mulling a range of new measures to curb
As Fernando Naranjo, general manager at the country's
largest financial institution Banco Nacional de Costa Rica,
puts it: "the restrictions are the hot button topic of the
The measures are designed to help Costa Rica deal with a
number of burgeoning macroeconomic distortions: large spreads
between local and US interest rates has led to an explosion in
foreign currency lending, which jumped 17.8% in 2012.
Central bank governor Rodrigo Bolaños says the new
directives will include more stringent provisioning and
re-rating risks, particularly for dollar lending to clients
without matching revenues, though he won't speculate on exact
measures before they are implemented.
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