QCOSTARICA — Created in 1985, the whereabouts of the Fondo de Garantía de Depósitos (Deposit Guarantee Fund), with a reported purse, in 2019, of US$30 million dollars, is now unknown.fun
The fund with a similar origin to that of the Deposit Guarantee Fund currently held by the Central Bank of Costa Rica (BCCR), is the “Guarantee Fund for investors in securities issued by private and cooperative banks,” whose last known destination was the coffers of the Asociación Bancaria Costarricense (ABA) – Costa Rican Banking Association, that does not provide answers about the money.
This fund, like the one that exists today, was created with resources provided by entities of the financial system to provide greater financial security by protecting depositors and savers. In other words, the objective of creating it was to have somewhere to take resources in the event of the debacle of financial entities such as those that occurred with Bancrédito, Banco BICSA, Aldesa, and, more recently, Coopeservidores.
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The fund was created with mandatory contributions from banks that mediated a series of loans provided by the United States Government’s Agency for International Development (USAID), as ABC’s legal advisor, Mario Gómez, explained in 2019 in an interview with SemanarioUniversidad.com.
According to Gómez, “AID took some money, lent it to the BCCR on the condition that it would lend it to private and state banks, to both, because, at that time, the BCCR also had a department that operated as a second-floor commercial bank. And, yes, the private banks were given the condition that, if they wanted access, they had to give the equivalent of four percentage points of the spread that they had at the time of placing those loans to the ABC to create that guarantee fund.”
The money collected — set by regulation at 4% of the interest rate charged on the loans — was first discussed as being deposited in the coffers of the Central Bank to be managed as part of the public resources of the national financial system.
However, says the former legislator of the Libertarian Movement, Patricia Pérez, at the initiative of the ABC and because the BCCR said it “did not have the capacity” to manage the fund, it was transferred to the ABC.
For Pérez, these funds “were and are public funds”, precisely because of their origin, but, although she carried out judicial proceedings before the Comptroller General of the Republic and the Central Bank itself, the unanimous response of the institutions and courts was that they were private funds and that the ABC should be their administrator.
In fact, during the judicial discussions, the articles of the “Regulations for the use of resources from the USAID assistance agreements 515-0185, 0186, 0192 and 0194” that created the fund were ordered to be eliminated, so its purpose—which in principle was to support savers and investors—was left undefined.
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“That is when the transformation takes place, so that they are no longer public funds, although, if you ask me, those are not private funds,” says Pérez.
The former legislator recalls that, even when a first version of the law that created the Fund was discussed, it was intended that the ABC fund would serve as seed capital to give it strength.
In fact, in legislative file 17,766 it is stated that the banking sector itself was in agreement. However, although it was approved in 2013, the bill that included this provision was never discussed and, when its four-year term expired (in 2018), it was archived.
In 2020, meanwhile, the “Law for the creation of the deposit guarantee fund and resolution mechanisms for financial intermediaries” was approved, left out any mention of the ABC funds.
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“In the four years that this fund operated, it collected almost US$25 million. Now imagine if it had continued. Now the fund turns 30 years old and that is the reason why it has never seen a problem in a fund, no one has been left owing this much in these 30 years,” Pérez laments.
Thus, almost four decades have passed and, during them, on multiple occasions savers and investors have seen their life savings go down the drain during the collapse of a financial institution, while it is not known where nearly US$30 million that was collected with the supposed objective of supporting them in such situations are.
SemanarioUniversidad.com reports it asked the ABC if the fund still existed or if it was liquidated and for what purpose, if it still existed, which entities it supports, how the resources are used and how much the amount was, but even though the queries were sent more than a month before the publication of this report and were insisted on multiple occasions, the bankers did not respond.
Translated and adapted from the original article in Spanish at SemanarioUniversidad.com
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