Financial Integration in Central America: Prospects and Adjustment Needs

By Jorge I Canales Kriljenko, Padamja Khandelwal, Alexander Lehmann

October 1, 2003

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Jorge I Canales Kriljenko, Padamja Khandelwal, and Alexander Lehmann. Financial Integration in Central America: Prospects and Adjustment Needs, (USA: International Monetary Fund, 2003) accessed September 19, 2024

Disclaimer: This Policy Dicussion Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We assess the current barriers to trade in financial services in the six Central American countries seeking a free trade agreement with the United States (the CAFTA) and examine the relative merits of regional and multilateral liberalization. Even though there are few formal barriers, deficiencies in regulatory and competition standards and in the judicial systems still restrict the participation of foreign institutions in the financial systems in the region. A greater presence of such institutions could support other objectives of trade and investment liberalization, though it would require several adjustments in prudential supervision at national levels and greater cooperation between members of the CAFTA.

Subject: Banking, Deposit insurance, Economic sectors, Financial crises, Financial institutions, Financial sector, Financial services, Foreign banks, International trade, Trade in services

Keywords: A number of bank, Banking market access restriction, CAFTA, Capital account, Central America, Central bank, Contract enforcement, Country authorities, Deposit insurance, Exchange regulation, Exit policy, Financial market, Financial sector, Financial services agreement, Foreign banks, Foreign exchange, Gats market access commitment, Insurance fund, Market access restriction, Market entry, Market participant, PDP, Supervisory authority, Trade in Financial Services, Trade in services

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Policy Discussion Paper No. 2003/003
Stock No:

PPIEA0032003
ISBN:

9781451974195
ISSN:

1564-5193

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