Central America: A whole new way of thinking
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Central America: A whole new way of thinking

Prompted by the ravages of Hurricane Mitch and the crisis in emerging markets, Central America is changing - fast. As the crisis in Brazil finally explodes the myth of monetary sovereignty, Central American capital markets and institutions are being restructured in line with global developments. Michael Peterson toured Central America's banking sector, stopping off in Costa Rica to interview the president.

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On a busy roundabout in Guatemala City stands an obelisk, a moderately impressive feat of 19th-century engineering. It is a symbol of independence at the heart of the city where Central America's sovereignty was declared in 1821. At the foot of the monument there is a glass case with an inscription that reads: "This flame symbolizes our supreme aspiration of liberty and justice. Venerate it. Respect it. Never let it go out." Inside the case there is a slightly rusty oil lamp - but no flame.

The assertive and optimistic mood of liberalism in which this country was born is long gone. Not only did the Federation of Central America hold together for only a handful of years but the social and economic freedoms its founding fathers fought for were soon forgotten. During the Cold War, in particular, military government, repression and civil war put paid to social freedom in much of the region.

Central America's largest banks by capital
Country Total capital $m Capital/assets % Total assets $m
1 Banco Agrícola Comercial El Salvador 128 6.7

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