Financial Integration in Central America: Prospects and Adjustment Needs

Author/Editor:

Jorge I Canales Kriljenko ; Padamja Khandelwal ; Alexander Lehmann

Publication Date:

October 1, 2003

Electronic Access:

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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.

Series:

Policy Discussion Paper No. 2003/003

Subject:

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

English

Publication Date:

October 1, 2003

ISBN/ISSN:

9781451974195/1564-5193

Stock No:

PPIEA0032003

Pages:

28

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