Mar. 10, 2020

Ruth Arregui


Ruth Arregui

Superintendent, Superintendency of Banks

“If we compare ourselves to countries like Chile that have social similarities, we observe they enjoy greater financial inclusion.”


Ruth Arregui was nominated as superintendent of banks by the Citizen Participation Council out of the three candidates proposed by President Lenín Moreno. Throughout her professional career, she has assumed key roles in the financial, economic, social, environment, and education sectors, such as general manager of the Central Bank of Ecuador and general manager of the Superintendence of Banks. She has a master's in microfinance and social development from the University of Alcalá and a master's in business administration from INCAE.

What is the extent of your regulatory role in the banking sector?

Until 2012, the Superintendency of Banks was responsible for overseeing the banking institutions (including public and private institutions), as well as the sector of 40 cooperatives of savings and insurance firms. We also oversaw investment banks, currency exchange bureaus, and other entities within the financial system. That year, a law removed the cooperatives from the oversight of the Superintendency, and another law in 2014 placed insurance and reinsurance firms under the control of another entity. Today, we control over 200 institutions, including 17 that are undergoing liquidation. We also have a banking board that regulates monetary policy.

Ecuador is progressively becoming a more internationally open economy. What role does the Superintendency play regarding these changes and the readiness of its banking system?

Much has to do with the scope of regulation. We have developed plans to detail potential improvements to the regulatory model. Many countries are moving toward the adoption of the Basel III standard. The problem with the Ecuadorian system is that we have fulfilled Basel I, but still have many steps remaining to apply Basel II, which results in improved levels of competitiveness for the financial markets. We must adopt regulations that have allowed the innovation somewhere else across the financial markets. The Superintendency is currently applying new operational plans to increase our efficiency and capacity to oversee the sector and increase financial inclusion. We also want to increase legal security in the market to make Ecuador more appealing to the international investor.

What relation do you have with other regulators abroad?

Back in 2008 and 2009, the Superintendency worked to strengthen the instruments and tools used to oversee the market in collaboration with certain transparency regulations. I mention this because we established certain MoUs with regulatory bodies from other countries in the region. The economy of Ecuador has not been in its best shape, having seen smaller budgets as a result. The current administration is revisiting certain critical elements that improve the oversight capacity.

Financial inclusion is squarely on the public agenda as a key tool for national development. How does the institution work in this regard?

I have been working toward and talking about financial inclusion for years, and we have made certain projections in support of it. If we compare ourselves to countries like Chile that have social similarities, we observe they enjoy greater financial inclusion. Ecuador in recent years has been doing a great job in financial inclusion by expanding the reach of micro financial services, but the pace has decelerated. We also have a problem in terms of connectivity. Compared to countries like Colombia, Ecuador has not been able to develop a better telecommunications infrastructure conducive to advancing financial inclusion. As a result, there are areas within Ecuador that lack a network system. If a citizen cannot make a basic phone call, it is hard to imagine them using the online banking system. Additionally, we need a law on data protection to foster user confidence in these systems. As long as the public policy is for tax collection only, it will be difficult to attract other telecoms to invest in a better network. One thing being discussed was the potential reduction of sales tax for online payments. Although this is a good idea, such incentives should be temporary.

Do you have any shorter-term priorities?

We are working to re-establish our autonomy in budget definition and the scope of our policies. We currently have a lack of optimal institutional structure within the Superintendency to attract foreign investment, which is why we want to re-institutionalize our organization to oversee the banks and wider sector, because the financial sector has torn down barriers in terms of internationalization. It is one of the most globalized and technology-hungry industries. Also, we are dollarized economy, which means the industry has enormous potential in Latin America.