Costa Rica bank mergers: Safety in numbers

A three-way merger of Costa Rica’s largest state-owned banks to help deal with desperate funding shortages and reduce their operating expenses is not without its drawbacks. Chloe Hayward reports from San José.

NO PART OF the world has escaped the present financial crisis – not even Costa Rica, the tiny central American nation that borders Nicaragua and Panama. As in many other countries, its banks went on a lending spree in the past couple of years. However, liquidity is now tight and banks are under pressure to refinance. Their growth is likely to slow. For the big three state-owned banks, an answer to their problems could be close at hand: a mega-merger.

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