Costa Rica | Banking Sector: Holding steady

Costa Rica | Banking Sector: Holding steady

Costa Rica Economy & Policy Corporate & Sovereign Strategy Bonds

Bankers in Costa Rica are digesting what many see as unwelcome news. 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 risk-taking. 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 moment”. 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 b

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