Bank solvency increases

The Liquidity Fund of the Ecuadorian Financial System

The Liquidity Fund of the Ecuadorian Financial System (FLSF) in charge of covering the private banks of Ecuador, managed, in August 2013 a total of $ 1,585 million. According to the report of the Central Bank of Ecuador (BCE), the entity that administers it.

The FLSF was established in February 2009, after the adoption of the Law Creating Financial Security Network, the company started with $ 405 million. After four years, the amount of funds deposited abroad has nearly multiplied its volume by four. BCE data suggest that the largest increase occurred between August 2012 and August 2013, when it went from $ 766 million to $ 1,585 million today.

Marcos Lopez, former member of the central bank board said that the liquidity fund was created after Ecuador did not have a lender of last resort, which would cover the liquidity for banks through loans. However, the former official explained that the fund could not support a systemic crisis, considering that bank deposits are around $ 22,300 million and the fund has almost $ 1,600 million.