The congress of Guatemala has been discussing Bill 5157,
which contains amendments to Decree 19-2002 (Law of Banks and
Financial Groups, or Ley de Bancos y Grupos
Financieros). These amendments have the backing of the
Ministry of Economy, the Monetary Board and the General
Secretariat of the Presidency of the Republic.
While the Law of Banks and Financial Groups was last amended
in 2013, there have been very few substantive modifications to
this law. This derives from the fact that the Monetary Board
regulates Guatemala's financial system through a series of
regulations it approves and which are binding for financial
institutions. Through Bill 5157 the executive branch seeks,
with the approval of congress, to undertake substantive
modifications to the Law of Banks and Financial Groups. These
modifications, if approved, could have a substantial effect on
the nation's financial system.
The proposed amendments include: a) the strengthening of
banking supervision by adapting the treatment that the
regulator gives to units of risk, as recommended by the Basel
Committee; b) the incorporation and application of
macro-prudential instruments to the capital adequacy of banks
and financial institutions (this will require those entities to
add further capital to the minimum percentage established in
law (10%) to increase the resilience of the financial system to
adverse shocks); and, c) the strengthening of the banking
safety network to adapt it to the dynamism of the international
financial markets. This is to be undertaken by providing
additional instruments which allow the financial regulator to
adequately address any adverse situations that may seriously
affect the financial system.
While there is no means to determine if and when this bill
passes, the effects of its approval may give way to a more
dynamic and strengthened financial system in Guatemala.
|Diego Alejos Rivera
Diagonal 6 10-01 zona 10
Centro Gerencial Las Margaritas Torre II,
Ciudad Guatemala, Guatemala.
T: (502) 2279-3939/ (502) 2324 - 3939
F: (502) 2279-3938/ (502) 2324 – 3938