LFCI

When the Chamorro administration assumed office in Nicaragua in April 1990, it inherited a collapsed financial system. Under Sandinista rule, the country's banking system, once the most fully developed in Central America, had deteriorated into little more than a mechanical arrangement for delivering subsidized credit under the auspices of the Central Bank of Nicaragua, without any meaningful supervision or surveillance by monetary authorities. In recent years, hyperinflation has further debilitated Nicaragua's financial system and severely eroded the asset and deposit bases of banking institutions. All four lending institutions -- Banco Nicaraguense de Industria y Comercio, Banco Nacional de Desarrollo, Banco Popular, and Banco Inmobiliario -- are insolvent. Routine transfers between cities may take up to a month before payment is finally credited, and even the mechanics for payment, clearance, and settlement of the fund transfers need to be overhauled. Inter- institutional competition of any kind is non-existent, and only the Central Bank is engaged in any international operation. A prompt, progressive, and comprehensive overhaul of the system is needed, covering both the pra

Source: DEC abstract, PN-ABJ-769 (1990). This is the source's own text, not a cited summary of the documents.