Enrique García Dubón, Economist, Central American Monetary Council and Gregor Heinrich, Chief Representative, Americas, Bank for International Settlements
Closer cooperation between neighbouring countries has throughout the ages been part of their respective political agendas. In many regions of the world, the desire to create efficient economic spaces, and eventually perhaps even political union, has been one of the driving forces behind political and institutional frameworks created in pursuit of such goals. Often, such goals have suffered setbacks, delays, changes in orientation, but also progress. The central banks of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua — through their joint organisation, the Central American Monetary Council (CMCA)1 — have recently inaugurated the regional interlinked payment system known as the SIP (Sistema de Interconexión de Pagos de Centroamérica y República Dominicana). The SIP is the framework for the interlinking of the region’s payment systems, allowing for crossborder ‘electronic funds transfers’ between participants without the need for corresponding banking relationships with institutions inside or outside the region. The system is the result of a broad programme for financial infrastructure development in the region, which was formally initiated in 2004. This represents a large step forward towards further integration in the region. This article offers an overview of the goals and practical functioning of SIP and the various steps leading up to its implementation within the context of regional integration.
Central America, cross border payments, central banks, CMCA, SIP
Enrique García Dubón is the Central American Monetary Council Economist. He has an MA in economics from the University of Texas and has been Chairman of the CMCA Payments Committee since 2000. His work fields are financial integration in Central America and finance infrastructure development for Central America and the Dominican Republic.
Gregor Heinrich is Chief Representative for the Bank for International Settlements’ (BIS) regional office for the Americas, based in Mexico City, with a particular focus on Latin America and the Caribbean. Before moving to Mexico in 2002, where he was responsible for building up the regional office, he was for three years Secretary of the Committee on Payment and Settlement Systems (CPSS), working in the Monetary and Economic Department of the BIS in Switzerland. He joined the BIS in 1994 and performed various functions in the legal department including support for the BIS information technology department, and work with UNCITRAL on harmonising international rules for funds transfers and electronic data interchange. His articles and presentations have focused mainly on supervisory and regulatory issues, payment systems, and central bank governance.
To read the full text of this article you will need to subscribe.