- Category: The Nation
- Published on Friday, June 22 2012 02:05
- Written by Rod Hughes
- Hits: 614
A bill by which the Executive Branch hoped to cure the nation's budgetary problems will seriously curtail autonomy of banks, the chiefs of three of the nation's largest banks have told lawmakers.
Fernando Naranjo, manager of Banco Nacional, Mario Rivera of Banco de Costa Rica and Guillermo Zuniga of Cartago's Agricultural Credit Bank (Bancredito) sent a strong message that the bill "implies a substantial reform of state bank autonomy."
The bill, known as the Efficient Management of Public Finance Law, would establish budgetary and information access to public entities accounts in order to organize state resources, explained the national newspaper La Nacion.
The Chinchilla Administration plan is an attempt to replace the failed tax reform bill and generate some 68 billion colones annually. (Tax reform was struck down by the Constitutional Chamber of the Supreme Court (Sala IV) after being passed by lawmakers.)
Other parts of the sweeping bill would establish rigorous fiscal measures, cap top public officials' salaries and have the Central Government take over some aspects of decentralized institutions' finances.
Discussion of the bill just started in the Financial Affair Committee of the Legislative Assembly and the three banks lost no time in presenting their objections that provisions of the bill applied to banks, crippling their operations.
Finance Minister Edgar Ayales, part of the early discussion of the bill, recommended that a clause exclude state banks from the full scope of the bill. He would like to see the banks considered part of the financial sector, not the public sector covered in the bill.
Citizen Action Party (PAC) lawmaker Gustavo Arias expressed reservations about the bill and thinks the bankers might have a point. But Social Christian Unity stalwart Luis Fishman feels the bill may fall short but still urged passage.
Commentary: Costa Rica's state banks have functioned well under current legislation and any adjustments should be made with extreme caution.
The situation is different in the United States, for example, where wheeling and dealing of private banks calls for controls. The $2 billion loss registered recently by the JP Morgan Chase Bank is only the tip of the iceberg.