Sate Banks Will Soon Be Able To
Offer More Loans
The Comisión de Asuntos
Económicos de la Asamblea Legislativa is expected to approve this
week a law that will allow state banks to lend out more money to
consumers and businesses.
The law would allow the Banco de Costa Rica (BCR), Banco Nacional
9bn0 and the Bancrédito (BCAC) to sell more bonds and at a higher
interest rate than the current.
The idea is that by selling more bonds, the banks will have more
capital thereby improving its asset adequacy indicator and offer
more loans.
The higher interest rate bonds will be sub-ordinate to other debtors
of the financial institutions, meaning they offer a higher risk to
the investor in the case of a bank's failure.
The decision to allow the sale of higher risk bonds is part of the
government's plan to prevent an economic crisis and added to the
us$117.5 million dollars the government funded the state banks for
loans to small and medium sized businesses.
Both the BCR and BN received us$50 million dollars, while the BCAC
received us$17.5 million. The Banco Popular is not considered a
wholly owned state bank and as such is not part of the government's
financial program.
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