ECUADOR

On April 15, the plenary of the National Assembly concluded the first debate of the bill to reform the Organic Monetary and Financial Code for the Defense of Dollarization, introduced by the Executive Branch. The regulation seeks to improve the supervision of the financial system and grant autonomy to the Central Bank of Ecuador (BCE, in Spanish). In the plenary there were two clear positions: legislators in favor of the bill, with some changes; and others against and in favor of shelving the initiative. Now, the Economic Regime Committee must take the observations made in order to prepare the report for the second debate.

During the plenary session, Verónica Artola, General Manager of the BCE expressed that the proposed reforms are necessary to consolidate dollarization, through the reconstruction and strengthening of the institutional basis that governs monetary matters. She also indicated that through a clear legal framework, the functions of the Monetary Policy and Regulation and Financial Regulation Board and the Central Bank of Ecuador (BCE) are defined. 

For his part, Marco López, delegate of the Monetary and Financial Policy Board, stated that it is essential to ensure technical independence in the Board’s decision making process, whose attributions and competencies must be clearly defined in the regulation. He also explained that the Central Bank’s international reserve serves to resist external shocks to the economy, such as the fall in the price of a barrel of oil.

In turn, the Assembly members that support the bill highlighted the importance of this law to protect dollarization. They also mentioned the importance of recovering the four balance sheets of the BCE, an institution that “should not be a commercial bank, but the custodian of the citizens’ money”. In this line, they mentioned that this entity cannot be a lender of the State. 

On the other hand, with a contrary position, several legislators mentioned that the bill of the Executive Branch is a “political marketing resource” to cover up the true aim of the initiative. They pointed out that the bill creates a new independent governance to establish monetary and financial policy through the establishment of two Boards, which would violate Article 303 of the Constitution, establishing that public economic, monetary, productive and social policy is the responsibility of the President of the Republic.