High rates mean high risk, banker says

Dear A.M. Costa Rica:

Sorry to pour cold water on the idea of alternative banks in Costa Rica.

It is essential to understand the implications of such ‘opportunities’. If interest rates are higher than in other institutions, that implies a higher risk. The rates quoted in the article are higher than those on offer in such exciting places as Greece and Cyprus.

If you are an inveterate gambler, high interest dollar accounts in Costa Rica might be a place to put all your money. On the other hand, qualified investment advisers would always advocate spreading your risks, even if you are willing to put some portion of funds in high risk, high return accounts.

Chris Clarke
retired economist and banker

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