On April 23, the plenary of the National Assembly passed the bill to reform the Organic Monetary and Financial Code for the Defense of Dollarization, presented by the Executive. The regulation seeks to improve the supervision of the financial system and grant autonomy to the Central Bank of Ecuador (BCE, in Spanish). Now, the approved text will be sent to the Executive for its enactment or objection. In case the Executive vetoes the initiative, the Legislative has until April 24 to analyze the observations made to the legislation.
During the plenary session, the legislators agreed to add a general provision on regulation and control of the private financial sector. The plenary established that under no circumstances will the State assume responsibility for bank solvency, nor will it act as guarantor for the financial system. Likewise, the Assembly agreed that the Financial Regulation and Policy Board will be the entity in charge of defining the interest rate system. Also, the new Board will establish the amounts and terms for the payment of public services through bank transfers, credit cards, debit cards or other electronic means of payment.
The Assembly members also stated that the proposed adjustments will reorganize and improve the structure of the BCE. In addition, they explained that dollarization and the financial system will be strengthened. They argued that the country’s economy “will have more liquidity, will protect citizens’ savings, will recover confidence”, which will allow to attract more domestic and foreign investment, and will promote transparency in the management of the financial system.
Regarding the regulation of savings and credit cooperatives, the Assembly members made adjustments to ensure the proper functioning and to preserve the fundamental characteristics of closed cooperatives. In this sense, their social function and their place in the financial system is recognized, allowing them to have access to reimbursable and non-reimbursable financing through associativity and solidarity.