AGD begins liquidations Nov. 15

Ecuador's deposit insurance agency AGD will begin November 15 the process of liquidating eight intervened financial institutions under the agency's control, smoothing future relations with the International Monetary Fund (IMF), local daily La Hora reported. The institutions in question are: Finiber, Amerca, Valorfinsa and Necmancorp as well as four banks: Financorp, Azuay, Tungurahua and Occidente. The liquidation process demonstrates the country's commitment to clean up the local financial system in return for greater flexibility on the part of the IMF in its future policy towards Ecuador, AGD head Wilma Salgado was quoted as saying. Finance minister Mauricio Pozo will present to IMF representatives the definitive list of financial entities targeted for liquidation as a clear signal of the government's determination to balance the financial system's books, the paper said. AGD was set up as a result of Ecuador's banking crisis in 1998-1999 and was responsible for intervening and closing financially troubled banks as well as reimbursing depositors. Bankers in the country have called on the government to eliminate the AGD, branding it a politicized white elephant and questioning the way the agency spent US$100mn in mandatory contributions by financial institutions.