Posted On 09 Dec 2016
The former executive president of the Association of Private Banks of Ecuador, Cesar Robalino, said in an interview with Ecuavisa that “The National Government can not have the audacity to take money from the bank reserve. Be careful, Mr. President! With all due respect and consideration for your authority, I tell you this. I hope that this danger does not happen, hopefully,” he remarked on the fear that the increase in the bank reserve from 2% to 5% will be used to finance the fiscal deficit.
Given the scarce financial resources of the Government, which is desperate and distressed, in search of more resources everywhere, it is feared that the money will be frozen in the BCE (Central Bank of Ecuador for its Spanish acronym). The BCE has already bought over C $ 4 billion Cetes (bonuses issued by the Ministry of Finance) to finance the fiscal deficit.
The fear of the market is that the money is taken from bank reserves, not from bankers but markets, and that is highly dangerous, he said.
What Minister of Economic Policy Patricio Rivera has said is practically an invitation for bankers to be irresponsible. It seems they do not remember that the global financial crisis occurred because the New York and European bankers were irresponsible when expanding the credit creating a credit bubble that triggered another bubble: real estate, which nearly bankrupts the largest banks in the world. “Bankers should refuse to play that role,” he said.
On reducing the value of certain banking services, he stated that this has electoral purposes to benefit candidates Lenin Moreno and Jorge Glas, “it is reprehensible that the Government makes decisions to benefit a political grouping and a candidate, that is the end.”