Central Bank Announces Reform to Limit Credit

Central Bank of Ecuador

This year due to the financial crisis that Ecuador has suffered increased the economic tensions. The recent resolution of the Central Bank demands that financial entities delegate more money to the Liquidity Fund to reduce the capacity of banks to give credits and boost the economy.

According to analysts the total deposits collected would be staying in the reserves and will not be used as loans for the market. This regulation states that the banks must increase their reserves to 5% until September of 2013 and afterwards continue with 1% per year until it reaches 10% in 2018.

Currently several private institutions have $725,58 millions in the Liquidity Fund, this quantity represents the 3,5% of the Public Obligations made by the deposit of users. If the same amounts of deposits were continual, the 10% would exceed two billion dollars up in 2017. (AV)