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TOPIC 22 THE FINANCIAL SYSTEM IN ECUADOR, image, image, image - Coggle…
TOPIC 22 THE FINANCIAL SYSTEM IN ECUADOR
THE FINANCIAL SYSTEM IN ECUADOR
Traditionally, banks have taken over the
money from the public in exchange for an interest.
the banking sector has expanded to more complex operations such as foreign currency exchange, equity investments of companies, payments for collections, money transfers and virtual transfers.
Large banks have merge with financial companies, credit cards, general insurance, brokerage houses, becoming a power of great economic importance.
CONSTITUTION OF THE FINANCIAL SYSTEM
This system is constituted by several types of institutions, both public and private.
MUTUALISTS: Financial institutions that offer mortgage loans for construction or home purchase.
SAVINGS AND CREDIT COOPERATIVES: They are smaller institutions that offer small amount loans.
PUBLIC BANKS: They manage state funds. Includes the Central Bank, State Bank, Development Bank, Ecuadorian Housing Bank, Pacific Bank, etc.
PRIVATE BANKS: They are the strongest institutions and cover the entire national territory.
GEOGRAPHICAL LOCATION
Before the crisis of 1999, the financial centers were located in Guayaquil, today they have moved mostly to Quito. The public banks remained unchanged. The ones that grew were the cooperatives.
LAST YEARS
At the end of the first decade of the 21st century, the Pichincha Bank is the most powerful institution in thecountry with the largest asset deposits and assets.
They are followed by the Guayaquil Bank,Produbanco and Pacific Bank. As for cooperatives, the geographical distribution is more homogeneous in the provinces, both coastal and mountain.
There is some more concentration in the Pichincha.As a result of the crisis of 1999, the mutualistic and the financial societies, which
in the past were numerous, have diminished.
CONTROL OF THE FINANCIAL SYSTEM
Between the year 1999 and 2000, the guarantee system for public deposits in financial institutions was very incipient. For this reason, when the financial crisis occurred in Ecuador and the credit was given to private banks, through public institutions, the State had to pay a good part of the money that the citizens had deposited in the banks, whose directors did not take responsibility for it.
The Deposit Insurance Corporation has the mission of protecting the deposits of the public inprivate financial institutions. With these new institutions we seek to create a safety net for the financial system and depositors or clients.
