ECUADOR

On April 3, the Economic Regime Committee of the Assembly began the study of the bill to reform the Organic Monetary and Financial Code for the Defense of Dollarization, presented by the Executive Branch. The bill seeks to improve the supervision of the financial system and grant autonomy to the Central Bank of Ecuador (BCE, in Spanish). The legislative board received the highest authorities of the Ministry of Finance, the Monetary and Financial Policy and Regulation Board, the BCE and the Superintendence of Banks. The initiative was presented as an urgent matter. This means that the Legislative Branch has 30 days to pronounce itself on the matter (i.e., it may approve, modify or reject it). In the event that no decision is issued, the Executive Branch is in a position to enact this bill as a decree.

The legislative board received the Minister of Economy and Finance, Mauricio Pozo, who stated that the initiative seeks to maintain the monetary system stable in order to preserve the integrity of dollarization, which requires technical independence of the Boards and the BCE. This will allow improving the functions of the control and supervision entities of the national financial system. 

For his part, Marcos López, delegate of the Monetary and Financial Policy Board, expressed the need to protect dollarization with “basic rules” to sustain the monetary scheme and the technical independence of the BCE in decision-making. He recalled that the institution was systematically decapitalized, between 2009 and 2017, with negative economic results for the country.

In turn, Verónica Artola, general manager of the BCE, highlighted the decision to consolidate dollarization by strengthening its institutional framework. Artola explained that under the proposal, the functions of the Central Bank will be: to implement monetary policy, to act as a reliable third party, custodian of international reserves and other assets, as well as manager of the central payment system. 

Finally, the Committee received Ruth Arregui, Superintendent of Banks, who pointed out that the bill establishes the sanctioning power of the entity over the entities of the Social Security System, as well as over natural and legal persons who incur in the infractions determined in the law. Meanwhile, Julio José Prado, president of Asobanca, pointed out that one of the main elements of the proposal is the reestablishment of the system of the four balance sheets of the BCE. He also stated that it is false that the regulation of fees and commissions will be eliminated.