Financial Integration in Central America: Prospects and Adjustment Needs

Jorge Canales Kriljenko, Padamja Khandelwal and Alexander Lehmann

No 2003/003, IMF Policy Discussion Papers from International Monetary Fund

Abstract: 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.

Keywords: PDP; financial market; capital account; foreign exchange; insurance fund; central bank; CAFTA; Trade in Financial Services; country authorities; market participant; contract enforcement; banking market access restriction; supervisory authority; financial services agreement; market access restriction; gats market access commitment; a number of bank; exit policy; exchange regulation; market entry; Foreign banks; Deposit insurance; Financial sector; Trade in services; Central America (search for similar items in EconPapers)
Pages: 28
Date: 2003-10-01
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Citations: View citations in EconPapers (2)

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