2023-08-03 16:02:13
The Ecuadorian banking system is adopting measures to face the possible economic losses that could be generated due to a high intensity El Niño phenomenon. If the forecasts are met, sectors such as agriculture, fishing, construction, transport, accommodation and food could be especially affected. According to calculations by the Pichincha College of Economists, direct losses could range between 1% and 1.5% of the country’s Gross Domestic Product (GDP).
Although the government of President Guillermo Lasso tried to implement emergency reforms to help with corporate debts during the crisis, the Constitutional Court (CC) denied the initiative. This leaves banks as key players in dealing with economic turmoil.
However, compared to previous El Niño events, Ecuadorian banks are in a stronger position. They have record levels of capitalization, high liquidity and solvency ratios, and good coverage of the delinquent portfolio.
In addition, banks have contingency plans that allow them to maintain service continuity and protect their customers in the event of external or internal events that may affect their financial stability.
Importantly, during the COVID-19 pandemic, banks have demonstrated flexibility by offering refinancing and credit restructuring alternatives, helping many customers navigate economic challenges.
Economists stress that, in this context, politicians should avoid offering waivers or measures that could harm the banking system, and instead focus on providing real solutions and not complicating things for entrepreneurs and the financial system in general.
(ecuadorenvivo.com)
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