President Guillermo Lasso explained that there was a request from Mexico to expand financial activity around the free trade agreement.
The Economic Development and Fiscal Sustainability Law that entered into force in Ecuador on December 1 last brings a provision that again allows the creation of financial groups.
With that paves the way for the signing of the Free Trade Agreement with Mexico and later the Pacific Alliance, as well as the possible participation of Mexican financial groups in the tender for the purchase of Banco del Pacífico.
Indeed, the creation of financial groups according to the new regulations means that opens a greater spectrum of operation for financial activities with a reform to two articles of the Monetary and Financial Code. The provisions indicate that financial activity It will no longer be focused solely on the financial system as such, but will also extend to the stock market and insurance systems.
In accordance with the President of the Republic, Guillermo Lasso, this reform was given at the request of Mexico in the negotiation of the Free Trade Agreement. In this way, the Development Law established a norm that allows “the creation of financial groups”.
According to what was explained by President Lasso in an interview given this week with two radio stations, this rule from the point of view of Mexico it translates into the interest of Mexican groups to come and invest, “and acquire, for example, Banco del Pacífico, under a competition of course,” he said. Banco del Pacífico is one of the assets of the State that has an advanced monetization process and that it plans to sell in 2022. This sale is part, even of the income expected by the Government in the budget for 2022.
President Lasso explained that these groups can have other types of activities. He commented that in Mexico there are no restrictions on the participation of financial groups in other businesses, and that is why the Government of Mexico has made this requirement for the Treaty. “This allows full admission to the Pacific Alliance and fulfill the theme of More Ecuador in the World and more world in Ecuador,” he said.
In the new law, then, Article 142 of the Monetary and Financial Code is amended that in the previous version it only spoke of the fact that financial activity was focused on “financial intermediation”. Now the norm says that financial activity “are operations and services that are linked to financial flows or risks and that are carried out on a regular basis by the entities that make up the financial, securities and insurance system, with prior authorization from control bodies. ”.
The concept is maintained that financial activities are a public order service, regulated and controlled by the State.
further, changes article 169 of the same Code in which it was indicated that people with patrimonial property with influence were those who have the 6 % of actions. Now this index goes up a 25 %.
According to Marcos López, economic analyst and former member of the defunct Monetary and Financial Board, this reform harmonizes the concept of financial activity with the concept that handles internationally, where financial activity is not just intermediation it includes the stock market and the insurance market.
For López, what the reform will allow is that anyone who intervenes in the financial services market can have a financial group made up of a bank or other company such as a brokerage, fund manager, reinsurance or broker. Thus financial groups would reappear, which is a logical concept, he said.
He also explained that this reform is necessary for the purposes of free trade agreements where the chapter on financial services does not cover only intermediation but everything that the reform has defined.
He remembered that since 2014 was reduced to financial activity, solely as intermediation and it was indicated that banks could only be banks and could not have other types of businesses. However, the issue will continue to be maintained that whoever owns a bank cannot have a means of communication or any other type of business since it is a prohibition that comes from the Constitution.
For López, with the change in the percentage to consider a shareholder as dominant, what could be achieved is that there are investors of various types, not necessarily financial, who can invest up to 24.99% without being considered dominant. (I)
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