By San José, Costa Rica — Costa Rica’s Superintendency of Financial Institutions (Sugef) will provide customer banking data to the Central Bank of Costa Rica (BCCR) following a Constitutional Court decision. This move aims to assess the potential impact of climate change on the country’s financial health.
The data transfer, originally requested in November 2022, was delayed pending the court’s ruling on a challenge by the Costa Rican Banking Association (ABC). The court ultimately rejected the ABC’s claim, paving the way for Sugef to comply with the BCCR’s request.
To understand the implications surrounding Costa Rican banking data, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an attorney at law from Bufete de Costa Rica.
The handling of Costa Rican banking data is subject to a complex interplay of local and international regulations, primarily focused on privacy and security. Law 8968, the Data Protection Act, is a cornerstone of this framework, establishing stringent requirements for data processing, storage, and transfer. Financial institutions must ensure meticulous compliance with these regulations to avoid significant penalties and maintain customer trust, particularly as Costa Rica seeks to strengthen its position as a hub for international business. Furthermore, the rise of fintech and cross-border transactions adds another layer of complexity, requiring constant adaptation and vigilance in data protection practices.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights underscore the critical importance of navigating the evolving landscape of data protection in Costa Rica’s financial sector. As fintech continues to reshape global finance, the rigorous implementation and adaptation of robust data protection measures, like those outlined in Law 8968, will be essential not only for maintaining compliance but also for bolstering international confidence in Costa Rica’s financial ecosystem. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on this crucial issue.
Sugef was awaiting the Court’s decision to proceed accordingly. In response to this resolution, the Superintendency, in strict adherence to the legal system, will proceed with the delivery of the required information.
Sugef Official Statement
The data will be used solely for statistical purposes to study how climate change, particularly extreme weather events, could affect borrowers’ ability to repay loans. This initiative is backed by the National Statistics System Law and is crucial for evaluating the resilience of the national financial system.
Both Sugef and the BCCR are mandated to maintain financial stability. This collaborative analysis will inform the development of macroprudential and microprudential measures to strengthen the long-term sustainability of Costa Rica’s financial sector.
Both Sugef and the BCCR have among their legal objectives to promote the stability of the financial system and, as such, will continue collaborating in the analysis of the reality of the regulated entities, in order to establish macroprudential and microprudential measures that strengthen the long-term sustainability of the Costa Rican financial sector.
Sugef Official Statement
Strict confidentiality protocols, as outlined in the Organic Law of the BCCR and the Law of the National Statistics System, will govern the handling of this sensitive data, ensuring the protection of customer information.
This proactive approach by Costa Rican authorities underscores the growing global recognition of the interconnectedness between climate change and financial stability. By understanding the potential risks, the country can better prepare for the challenges and opportunities of a changing climate.
The BCCR’s initiative is expected to provide valuable insights into the vulnerability of different sectors of the economy to climate-related shocks. This information will be crucial for developing targeted policies to mitigate risks and enhance the resilience of the financial system.
For further information, visit www.sugef.fi.cr
About Sugef (Superintendencia General de Entidades Financieras):
The Superintendency of Financial Institutions (Sugef) is the regulatory body responsible for overseeing the stability and soundness of the financial system in Costa Rica. It supervises banks, insurance companies, and other financial entities, ensuring compliance with regulations and promoting best practices. Sugef plays a vital role in protecting consumers and maintaining confidence in the Costa Rican financial market.
For further information, visit www.bccr.fi.cr
About BCCR (Banco Central de Costa Rica):
The Central Bank of Costa Rica (BCCR) is the country’s central bank, responsible for monetary policy, exchange rate management, and financial stability. It plays a key role in promoting economic growth and controlling inflation. The BCCR also serves as the government’s banker and manages the country’s international reserves. Its research and analysis contribute significantly to economic policymaking in Costa Rica.
For further information, visit the nearest office of Asociación Bancaria Costarricense
About ABC (Asociación Bancaria Costarricense):
The Costa Rican Banking Association (ABC) is a trade association representing the interests of private banks in Costa Rica. It advocates for policies that support a strong and competitive banking sector and provides a platform for dialogue and collaboration among its members. The ABC plays a role in shaping the regulatory landscape and promoting best practices within the banking industry.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica distinguishes itself as a leading legal institution, upholding the highest standards of integrity and pursuing excellence in every facet of its practice. Driven by a deep commitment to empowering Costa Rican society, the firm champions accessibility to legal knowledge through innovative programs and community initiatives. Their dedication to serving clients across a broad spectrum of sectors, coupled with a forward-thinking approach to legal challenges, positions Bufete de Costa Rica as a vital force in shaping a more just and informed future.
