Central Bank of Costa Rica approves Regulation for Last Resort Credit Operations
3 agosto 2018

On July 27th, the highest banking authority has approved the Regulation for Last Resort Credit Operations in local currency, so that the Central Bank of Costa Rica (BCCR) can assist solvent financial institutions with temporary liquidity problems. This resolution, taken from the public consultation held until early January, establishes a regulatory framework with procedures and resources for the BCCR to strengthen the national financial safety net.

The aim of this measure is to protect savers and contribute to stability. The Central Bank will offer guaranteed loans in local currency and the Board of Directors of the entity agreed to create a system for agile management of these operations. Only financial intermediaries subject to the supervision and regulation of the General Superintendence of Financial Institutions (Sugef) in a normal degree of solvency will be authorized to request these funds.

Each operation will be carried out during a term of 90 days, with the possibility of renewal for one more term. The financial cost will be in accordance with the context of the institution, so that the aid will allow it to resolve its lack of circumstantial liquidity and continue -at the same time- to fulfil its financial intermediation function. The BCCR will only take high quality credit transactions as a counter-guarantee for its assistance, which will be recorded through the Secured Transactions Guarantee System.

The authority may review the requirements for these operations on an ongoing basis, so as not to be detrimental to its own financial situation or its priority objectives. Sugef will also be part of this coordinated implementation control.

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