ECUADOR

On January 5, the Economic Regime Committee held a meeting in which it received authorities from the Superintendency of Banks to provide comments on the bill that reforms the Organic Monetary and Financial Code to regulate interest rates in the financial system. The committee will convene representatives of the sector again next week. At the same time, the Committee of Political Oversight and Control approved the work schedule to process the request for impeachment of Ruth Arregui Solano, Superintendent of Banks, for failure to perform her duties. On January 21 testimonies will begin based on the requirements of the committee.

Bill on interest rates

On the occasion, the Superintendency of Banks’ Intendant of Risk Analysis and Studies, Jonathan León, mentioned that all sectors of the national financial system, including the private sector, have specific regulations that “preserve the stability and soundness of the system”. He also indicated that the Financial Regulation Policy Board has the legal powers to regulate the system of maximum interest rates for financial asset and liability operations, and that the fact of maintaining provisions higher than expected losses does not affect interest rates, but “provides greater security to financial users”.

In turn, legislator Pabel Muñoz (independent) requested to summon the authorities of the Central Bank and the Monetary and Financial Regulation Boards to explain the new methodology on interest rates, which was supported by the president of the Committee, Mireya Pazmiño (Pachakutik – opposition). Likewise, Osmar Pañaherrera, president of the Association of Integration Organizations of the Popular and Solidarity Financial Sector, requested that the issue be analyzed from the perspective of the guarantee and security of depositors’ money.

Impeachment of the Superintendent of Banks

 Regarding the support of the impeachment of the head of the Superintendency of Banks, who proposed the measure, Darwin Pereira (Pachakutik – opposition), accused the official of inaction in her work performance with respect to the exercise of control of the institutions of the financial system during the health emergency caused by Covid-19, alleging that they were not well supervised, which caused the charging of undue interest to the population in breach of the financial regulations in force, such as the Organic Monetary and Financial Code.

 On the other hand, the committee indicated that the approved schedule includes 23 appearances requested by the interpellant, so that the official, in her defense, may obtain testimonial evidence. The testimonies will begin on Friday, January 21 and the deadline for the preparation of the report for discussion of the impeachment expires on February 2. In case a five-day extension is required, the report would be approved until February 7.