Central Bank publishes regulations on counter-cyclical estimates and debt rating
8 junio 2018

On June 1st, the Central Bank of Costa Rica (BCCR) published in the Official Gazette the amendments to two regulations: Agreement SUGEF 19-16 and Agreement SUGEF 1-05. These measures increase the counter-cyclical spending and regulate the generic estimates assigned for the classification of debtors.

 

The first measure establishes that the expenditure to avoid the volatility of the financial system (through counter-cyclical policies) will be equivalent to the income of each entity, including taxes and participations on the utility. Expenses will be subtracted from the amount resulting from this operation. Once the regulation comes into force in July 2018, the minimum registration will be 5% and will increase 1% every year until it reaches 7% June 1st, 2020.

 

On the other hand, the second agreement establishes that financial institutions must raise by 1% the banking threshold that determines that a natural person stops being able to take credit. This limit will be 35% for mortgage loans and 30% for bank loans. In turn, the banks’ credit policies will set the terms for updating the debt services’ coverage indicator. Operations in foreign currency will run with an additional estimate of 1.5% for debtors that do not generate foreign currency as from July 2018.

In the coming weeks the Financial Institutions’ General Superintendence (Sugef) will establish the format, contents and periodicity that supervised companies must respect when submitting the variables used for the calculation to this authority.

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