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THE FINANCIAL SYSTEM IN ECUADOR - Coggle Diagram
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. Due to the advance of commercial operations and technology, 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.
CONSTITUTION OF THE FINANCIAL SYSTEM
This system is constituted by several types of institutions, both public and private.
These are the main types of financial systems:
Private Banks They are the strongest institutions and cover
the entire national territory.
Public Banks They manage state funds. Includes the Central
Bank, State Bank, etc.
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.
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.
LAST YEARS
At the end of the first decade of the 21st century, the Pichincha Bank is the most powerful institution in the country with the largest asset deposits and assets. They are followed by the Guayaquil Bank,
Produbanco and Pacific Bank.
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.
For this reason, the State's control system over the financial system has been strengthened. After the bad experience of the Deposit Guarantee Agency (AGD), the Financial Liquidity Fund has been created, whose objective is to provide extraordinary loans when financial institutions need it.
