The people of Ecuador are rising up to refound their country as a pluri-national homeland for all. This inspiring movement, with Ecuador's indigenous peoples at its heart, is part of the revolution spreading across the Americas, laying the groundwork for a new, fairer, world. Ecuador Rising aims to bring news and analysis of events unfolding in Ecuador to english speakers.

Monday, June 01, 2009

Ecuador orders banks to repatriate some assets

QUITO, May 30 (Reuters) - Ecuador's government-run central bank has ordered private banks to repatriate $1.2 billion in overseas deposits and investments to help jump-start the economy, leftist President Rafael Correa said on Saturday.

The central bank board imposed a domestic liquidity requirement to force banks to keep at least 45 percent of their assets and investments inside the Andean country.

"This means the party is over for some bankers ... Now banks will have to bring back lots of money they held abroad," Correa, who accuses bankers of funding opposition politicians, said during his weekly media address.

Since winning re-election last month Correa has threatened to take action against private banks that don't bring back deposits held abroad and extend credit to clients as the OPEC-nation struggles to weather the global financial crisis.

Correa, a former economy minister, said financial institutions are holding nearly $4 billion in assets abroad that he says should be invested in Ecuador. He also accuses some banks of slashing their credit portfolios to undermine his leftist government.

He added that repatriated money should go into new credits to boost the economy.

Private bankers have said they are keeping some assets abroad to protect their liquidity amid the economic uncertainty generated by Correa's leftist programs and the global crisis.

Banks also said the government has not fulfilled its part of a deal agreed earlier this year to keep about $1 billion in public-sector deposits in the financial system and inject extra liquidity into banks.

Falling deposits due to the crisis and Ecuador's default on its foreign debt last year have pushed banks to lower credit levels as a way to safeguard liquidity, bankers said.

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