The risk assessment firm of Bear Stearns considers the banking sector of the Dominican Republic to have the capacity and determination to weather the current financial storm. For this reason, they have given the bond issues a new rating of Ba2/B+. In their ?Update on Sovereign Bonds in Latin America? report, Bear Stearns says that the government?s plan to strengthen regulations and supervision has been well received by the financial community, which itself is poised to undergo external auditing as part of the IMF agreements. Successful mergers (Bancredito-Banco Profesional) and liquidation of assets (Baninter) of some banks has also been considered ?healthy? by Bear Stearns.
Overall, the report says that there is cause for optimism regarding the capacity of the banking system to rise above present conditions. While confirming that the current difficulties besetting the financial climate are fiscal and financially manageable, the report opines that the situation does not suggest an economic breakdown, but rather the need for the country to continue its fight to stay afloat. The stand-by agreement with the IMF, which Bear Stearns admits will entail some painful measures, should be signed by the end of July. The pact should allow US$1.2 billion dollars to be disbursed over the next two years, returning confidence to consumers and investors and stability to the exchange rate.