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Anyone have any information about this, anything recent? I guess this could be called the first bank failure in Costa Rica.. is there any insurance on the bank accounts here? I have lots of tico friends saying “someone” in their family is out a lot of money.. just intereted what is actualy happening and what can be expected if a bank “fails” in Costa Rica?
Unlike the US, which can print money out their culo’s (with no regards to future inflation, or hyperinflation) to cover banks loses, Costa Rica would face a more realistic situation where… Deposits are actualy lost? At least in the private banks, what would happen with BCR or BN ?
Found a little article.. :
Coopemex depositors may face a long road to get money
By Saray Ramírez Vindas
and the A.M. Costa Rica staffThe case of Coopemex is beginning to look a lot like Banco Elca, which was taken over by regulators in 2004.
Coopemex, more correctly the Servicio Cooperativo Nacional de Ahorro y Crédito de los Trabajadores Costarricenses, came into the hands of regulators last week, mainly because the percentage of reserve funds held by the bank fell below the required 10 percent threshold.
The savings cooperative has 18 branches and nearly 90,000 depositors. Many are in areas populated by expats like Arenal.
Elca was taken over June 29, 2004, and depositors had a grueling period trying to get their money.
If Elca is any guide, Coopemex depositors with less than $10,000 on deposit can expect to get their money in a short time. Those with larger deposits will become involved in a committee of creditors, extensive meetings and a great deal of paperwork to prove who they are and that they had accounts at the institution.
A panel of overseers will be elected to sell off assets.
Foreigners who had funds at Elca had to provide the same form of consular validated paperwork that applicants for residency do.Carlos Alvarado Moya, the president of Elca, faced trial on fraud. A three-judge panel found him guilty April 30, 2008, almost exactly four years after the institution was taken over. Elca, too, suffered from a shortage of funds.
Banking industry sources suspect that Coopemex will never again open its doors. They also express concern about other cooperatives, although those in the financial area of the government discount such fears.
Elca’s Alvarado was convicted of playing fast and loose with the bank’s money. Coopemex, on the other hand, appears to have been caught by extensive delinquencies from its 40,000 or so loan customers. There has been no suggestion of irregularity, even though these cases usually are remanded to prosecutors for investigation.
The Superintendencia General de Entidades Financieras did say in a statement issued last week that Coopemex was being administered in a way to affect the solvency, transparency and security. Outside auditors who looked at the Coopemex books in December were unable to issue an opinion as to its stability, said the Superintendencia.
ah, the fractional reserve debacle. what scam that is. have you read the creature from jekyll island? do it and you won’t ever want to put your money in any bank. private banks here have no insurance for depositers. bn and bcr do. i keep only a tiny bit of cash in hsbc, but since it’s a very old and very large banking system, i don’t worry very much about it going under.
The national banks have what is called an implicit and unlimited guarantee on deposits. For practical purposes, then, deposits “will” be covered in the event of a bank loss. Most importantly, as it lends to an understanding of the comparative differences between the US and CR banking systems, the US Government does NOT print money to cover bank losses (be it from their collective culos or elsewhere!) The FDIC if fully funded by institution premiums, and from held Treasury securities. Many proposals are in place around Central and Latin America around deposit insurance and its role in investment, the critical role of which we Americans learned after 1933. Trust in CR’s ability to protect your deposits is up to you. Remember that many Americans don’t trust the FDIC’s ability, which is one reason the FDIC doesn’t publish the “watch” list for troubled banks- there is typically a line outside when such information is leaked, comprised of folks wanting their money in their hand!
Yes of course.. the FDIC, though it currently is not funded by the government, it soon may be. I like to watch what banks are closed on “FDIC Friday”, I love how they pick the end of the week to close banks, as there is less notice on the news.
Also what I was refering to was the Bailouts, which was money that went to large banks to “prevent” bank failures, such a large sum had to be printed somehow and was indeed funded by the US government. If those banks failed, the FDIC would be wiped out/bankrupt. So because it prevented that situation, I look at it as pretty much the same thing..
I feel the safest place to hold investments right now is in precious metals.. but thats just my own opionion
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