After a renewal process of the National Council for Supervision of the Financial System (Conassif), the body is now led by Humberto Grant Alpízar, who was appointed for the next two years as president.
Grant Alpízar has been part of Conassif since March 2024, when he was appointed by the Board of Directors of the Central Bank of Costa Rica (BCCR) for a period of five years, in the midst of a process of changes in the Board of Directors.
Conassif is an independent body in charge of directing and coordinating the regulation and supervision of the Costa Rican financial system. Below is an excerpt from the interview with The Nation.
President of Conassif talks about relationship with the BCCR
— The Conassif has undergone a transformation in recent years, with a renewal of its board in a turbulent time. How have you handled this process from the Council?
— The process of change was unusually fast, due to historical coincidences that caused the appointments to be grouped together. Last year, almost all the directors changed, at a time when crises arose that had not occurred for several years.
“In that situation, the support of the superintendencies helps one adapt, even if the situation is complex. It is a hard change, it is an accelerated change, but we had good support.”
— The Conassif comes from a time of confrontations with the BCCR. How is the relationship between the institutions currently? Were those bridges rebuilt?
– I think so. I think there is a much better relationship than starting from personal relationships. I have known Mr. Róger (Madrigal, president of the Central Bank), Mr. Pablo Villalobos (manager of the BCCR) and Mrs. Hazel (Valverde), who is now in the Superintendency, for a long time.
“Basically, we have much better relationships, based on the human relationship. We all understand that it is better to work together than to be at odds. When there are differences, they try to be resolved and I have not seen any that escalate or become complicated.”
Generational funds
— Recently, Conassif approved a new extension to generational funds. Why is that decision made? Is the ROP reform being buried with this second postponement?
—The reform is not being buried with the postponement. This is a learning we had from the first round. The deadline to bring a reform of this type to fruition has to be longer.
“One cannot try to reform one of the most fundamental things of the pension system in 10-12 months. It is not healthy. It can be done, and the culture of compliance that the entities have leads us to look for how to achieve it, but that does not necessarily give us the best path.
“Last year Supén proposed a more extended calendar, which includes these spaces for discussion, review and response. We are going towards a healthier version of the reform. “I wouldn’t think it was an end.”
— Is the study you requested going to be carried out by the Central Bank? Is it already defined?
—The Central Bank is going to do it. This is another thing we talk about about improving relationships. The Central Bank has an analytical capacity, in my opinion, that is difficult to match in this country.
President of Conassif refers to extension of generational funds
— Does the Central Bank have experience doing actuarial studies?
— The Central Bank does not have experience doing actuarial studies; It has officials who are actuaries by profession. This is a more financial study, in which we see, in the first instance, what the behavior of the funds, movements and returns will be under one scheme and another. The Central Bank can do that, quite safely.
—Has it already been analyzed or discussed within the Council whether or not Róger Madrigal can participate in the session, or if there is some type of conflict on the issue of generational funds?
— Mr. Róger’s great concern as a central banker—and I understand it, and I would think that it is a concern for the entire Board of the Central Bank—is the issue of macroeconomic stability. On that, there is still no final definition; It is part of the process.”
Expedited ROP Retirement
— The complementary system has already turned 26 years old. Now projects to get the money proliferate. Have the regulator, the supervisors and the operators themselves analyzed whether it took too long to propose changes?
– At this moment we are seeing the wisdom that the country had 26 years ago with the law that protects the worker and the need to have a complementary pension in the event that the basic regime falters.
“In the discussion of an eventual immediate or accelerated return of the ROP (Mandatory Pension Regime), the notion that we are in a historic moment for the basic regime has not adequately penetrated. We are in a historic moment, in a bad sense, for the basic regime.
“That has to be a premise of the discussion. I think it hasn’t been, that it has tried to divert the conversation a little, but that has to be a premise. There are exceptional scenarios; the Council has not decided anything, but I believe that exceptional cases, such as serious illnesses, can be discussed.”
Sale of the BCR
—The president-elect put the sale of the Bank of Costa Rica on the table. What would be the role of Conassif in an eventual proposal of this type?
— The law grants the Council authorization for any change of ownership, merger process, transfer of shares or sale of a regulated entity. There we would rely on criteria from the Superintendency and, eventually, Coprocom.
“The function of the Council is the final authorization, based on the materials we have to make the decision. What I would highlight is that there is a path taken, a process already known to manage changes of ownership in banks and financial entities in Costa Rica.
“From our point of view, this is transparent. It could be a government entity, it could be very large, but we would treat it like any other entity that the shareholder decides to put up for sale, merge or make some decision.”
—The banking system has been shrinking. Prival left the intermediation market and Davivienda is in the process of merging with Scotiabank. Do we have enough banks for the national market?
— The trend towards consolidation is global and will continue. I cannot tell you which entity will be the next to merge or acquire another entity. I cannot identify what is going to happen, but I do believe that the trend towards consolidation is global; It is natural, especially in a market like ours, which is so small and unprofitable.
“In almost the entire world there are about four or five large banks that dominate the system and some small, very niche banks that are very specialized. Here we can arrive at something similar”.
