Ecuador: Financial System Stability Assessment

IMF Staff Country Reports, September 21, 2023

Source details

Canonical URL

Ecuador: Financial System Stability Assessment

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Published: September 21, 2023
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400254208.002

Overview and context

• Publication date: September 21, 2023
• Publication type: IMF Staff Country Reports; Country Report No. 2023/335; Issue: 335; Volume: 2023; Pages: 50
• DOI: https://doi.org/10.5089/9798400254208.002
• Stock No: 1ECUEA2023001
• ISBN: 9798400254208
• ISSN: 1934-7685
• Subject tags as provided: Credit, Financial institutions, Financial regulation and supervision, Financial Sector Assessment Program, Financial sector policy and analysis, International organization, Loans, Monetary policy, Money, State-owned banks
• Keywords as provided: B. bank solvency stress tests, Caribbean, Credit, emergency liquidity assistance facility, Financial Sector Assessment Program, Global, lender-of-last resort function, liquidity analysis, liquidity condition, liquidity fund, liquidity vulnerability, Loans, State-owned banks, World Bank FSAP mission
• Note on eLibrary: "Our eLibrary offers over 25,000 IMF publications in multiple formats."

Key findings: financial system structure and risks

• Banks and credit cooperatives dominate Ecuador’s financial system.
• Dollarization provides an important anchor for the Ecuadorean economy.
• Systemic liquidity risks are high due to the limited capacity of the central bank to provide liquidity.
• The financial sector is overall resilient to adverse macrofinancial shocks, but some institutions have meaningful solvency and liquidity vulnerabilities.
• To preserve confidence it is key to:
  • enhance capitalization,
  • promptly recognize loan losses,
  • address unviable institutions.

Institutional assessment and supervisory framework

• The FSSA concluded that the institutional framework for financial sector oversight is:
  • complex,
  • uncoordinated,
  • prone to political intervention.
• Identified reform priorities:
  • enhance supervisory independence,
  • prioritize safety and soundness,
  • separate prudential supervision from other functions,
  • substantially strengthen the supervisory approach.
• Macroprudential framework needs further progress by:
  • developing stronger financial sector-wide analytical capacity,
  • improving information sharing and coordination,
  • clarifying the roles between multiple agencies.

Policy recommendations and near-term actions

• Strengthen capitalization across vulnerable institutions.
• Ensure prompt recognition and provisioning for loan losses.
• Resolve or restructure unviable institutions to preserve confidence.
• Reform institutional oversight to reduce political intervention and improve coordination.
• Build macroprudential analytical capacity and mechanisms for information sharing and role clarity among agencies.

Publication and access notes

• Format options noted on the landing page: "Download PDF" and "More Formats on IMF eLibrary".
• Citation example provided on page: International Monetary Fund. Monetary and Capital Markets Department "Ecuador: Financial System Stability Assessment", IMF Staff Country Reports 2023, 335 (2023), accessed 9/10/2026, https://doi.org/10.5089/9798400254208.002

Source: IMF Staff Country Report "Ecuador: Financial System Stability Assessment", Country Report No. 2023/335 (September 21, 2023).

Content in this bundle

• Ecuador: Financial System Stability Assessment; IMF Country Report No. 23/335; August 4, 2023
  • Ecuador: Financial System Stability Assessment; IMF Country Report No. 23/335; August 4, 2023 (Markdown version)
  • Ecuador: Financial System Stability Assessment; IMF Country Report No. 23/335; August 4, 2023 (PDF)