Inter-American Dialogues

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Inter-American Dialogues

  1. 1. www.thedialogue.org January 13-26, 2011 BOARD OF ADVISORS FEATURED Q&A Luis Anavitarte Franco Moccia VP & Research Consultant How Would Ecuadors Banking Referendum Affect the Economy? Director, Gartner Inc. A constitutional referendum Q Edward L. business groups? Also, it would seem Ernesto Armenteros Monahan Jr. planned in Ecuador would ask financial institutions would be banned Vice President, Strategy Advisor citizens whether to limit banks from investing in stocks. Would insurers Banco de Ahorro y to providing financial services also be banned from investing in stocks? Crédito Unión S.A. Thomas Morante Partner, only. Business interests outside the finan- Banning bank managers from holding Holland & Knight, LLP cial sector could lead to conflicts of inter- stock would mean that bankers would Richard Child Founder, est, said the office of President Rafael essentially have to invest their equity over- Manuel Orozco Correa. How would barring banks from seas. A similar ban on bank directors Mattrix Group Director, Remittances & Development holdings outside of the financial services would mean the end of functioning bank Jeanne Del Casino Program, Inter- industry affect Ecuadors economy? boards, since it makes little sense to have VP & Regional Credit American Dialogue Which companies would be most affect- board members that have no link whatso- Officer, Latin American Banks, Moodys ed, and how would it affect consumers? ever to the private economy. Consumers Adalberto Palma- Investors Service Gomez What are the chances for the referen- would not be directly affected, but some Senior Partner, dums passage? business groups would have to divest Michael Diaz Jr. APERTURE S.C. Continued on page 3 Partner, Walter Spurrier, president of A Diaz, Reus & Targ, LLP Yoshihiro Sakai Executive VP, Grupo Spurrier and director of Ernesto Fernández Microfinance Weekly Analysis in Guayaquil, Holmann International Corp. Ecuador: "If the question is Chairman of the included in the referendum in its present Board, Ayucus Jan Smith form (the referendum is still at a prelimi- Former Managing Tom Haider Director, nary stage), quite likely it would be Consultant Kroll, Inc. approved, as bankers are not popular and the president is. But the Constitutional Earl Jarrett Roberto Teixeira Court could object that it curtails the General Manager, da Costa Board Member, rights of citizens—in this case, those of Jamaica National Building Society SulAmérica S/A bankers and bank directors—and that in Bradesco, Citibank Reportedly itself is unconstitutional. The devil is in the Interested in PanAmericano Thomas J. details. There are restrictions now on Mackell Jr. investments in nonfinancial businesses by Brazils Banco Bradesco and U.S.- Chairman, banks. But many banks own insurance based Citigroup are reportedly interest- United Benefits and Pension Services Inc. companies. Would these investments be ed in buying Banco PanAmericano, Subscribers may pose questions to the allowed, and thus, insurance be considered which is controlled by billionaire Silvio Board of Advisors for the Featured Q&A by part of the financial business? In which Santos. See story on page 2. contacting Editor Gene Kuleta at: case, will insurance companies be barred gkuleta@thedialogue.org Masthead- File Photo: Brazilian Government. -End from having linkages with nonfinancialInside This IssueFEATURED Q&A: How Would Ecuadors Jamaican Lower House Approves Inflation, Peso Shortage DriveBanking Referendum Affect the Economy?.......1 Wider Protections for Depositors........................2 Up Argentine Credit Card Debt ............................3Bradesco, Citibank Express Interest Mexicos Gruma to Sell Most Subscriber Notice: Yoshihiro Sakai Joinsin Buying Banco PanAmericano..........................2 of Stake in Banorte ................................................2 Financial Services Advisor Board .......................4Santander Chile Planning to Chiles CorpBanca Reports Political and Economic News:Increase Loans to $5.5 Billion ..............................2 38.7% Increase in Profit for 2010 .........................3 Haiti, Brazil, Cuba and More.............................4-5Copyright © 2011, Inter-American Dialogue Page 1 of 6
  2. 2. Inter-American Dialogue’s Financial Services Advisor January 13-26, 2010 FINANCIAL SERVICES BRIEFS Financial Services News Mexicos Gruma to Sell Most of Stake in Banorte Bradesco, Citibank Express Interest told El Mercurio in an interview published Mexicos Gruma said Jan. 21 that it in Buying Banco PanAmericano Jan. 22. An increase of that size would is planning to sell most of its stake amount to a 17 percent increase from Brazils Banco Bradesco and U.S.-based 2010. The bank is seeking to boost loans in Grupo Financiero Banorte Citigroup have expressed interest in buy- to $18 billion within three years and the through a secondary offering, Dow ing Banco PanAmericano, Brazilian increase would come mainly from financ- Jones reported. Gruma, a maker of newspaper Folha de São Paulo reported ing to medium and small enterprises and corn flour and tortillas, has an 8.8 Jan. 22. However, Silvio Santos, who con- individuals, Mauricio Larraín told the percent stake in the banking group. trols the Brazil-based bank that received Santiago-based newspaper. The bank In a filing with Mexicos stock an emergency injection of capital last year, wants to add 80,000 new customers and exchange, Gruma said its global open 20 new branches to add to the more offering of as many as 156 million than 400 currently operating in the coun- shares of Banorte will be made try, said Larraín. After the global financial PanAmericano received an crisis, Santander Chile became the through a public offering in Mexico and a private offering in the United emergency capital injection of Spanish banks fourth largest operation, States and other foreign countries. after Brazil, Spain and Britain. The approximately $1.5 billion Chilean unit contributed 8 percent of BofA Merrill Lynch Names Rosen in November. Santanders total profits. Santander To Investment Banking Post Chiles growth will be funded through the banks profits and bond sales in Chile, the Bank of America Merrill Lynch became reluctant to sell PanAmericano United States, Europe and Asia, said announced Jan. 12 that it has named when negotiations began looking into a Larraín. Mark Rosen as its head of Latin possible selling price for the bank, the American investment banking. newspaper reported. Officials from Jamaican Lower House Approves Based in New York, Rosen will be Bradesco, Citibank and PanAmericano Wider Protections for Depositors responsible for the companys refused to publicly comment for the investment banking franchise for the report, which cited unnamed executives Jamaicas House of Representatives has entire region except for Brazil. who are part of the discussions. Santos approved a package of wider protections Before joining Bank of America holding group, Grupo Silvio Santos on for depositors under the countrys Merrill Lynch, Rosen worked at Nov. 9 borrowed approximately 2.5 billion Deposit Insurance Act, the Jamaica Credit Suisse for 12 years as head of reais ($1.5 billion) from Brazils Deposit Gleaner reported Jan. 21. The changes, Insurance Fund, a nongovernmental which still must pass the Senate to take Latin American and Caribbean banking guarantor, after the countrys effect, affect depositors with trust financial institutions investment central bank discovered accounting prob- accounts and in instances where financial banking. Before that he was head of lems in PanAmericanos books. institutions merge. Now, the Jamaica Latin American M&A at Barclays. PanAmericanos controlling shareholders, Deposit Insurance Corporation, or JDIC, which include Brazil-based Caixa will be able to make direct payments to Allpoint Network Adds More Than 2,500 ATMs in Mexico Econômica Federal, have previously said depositors who have accounts in dis- PanAmericano is not for sale, Reuters tressed banks and other financial institu- U.S.-based interbank network reported. Nevertheless, speculation has tions when the Allpoint said Jan. 18 that it has continued about a possible acquisition of accounts are part of a added 2,500 automated teller the bank. Brazilian lender Banco BMG, trust. Previously, the machines in Mexico in locations which specializes in loans to consumers, is corporation was lim- including OXXO convenience stores. also reportedly interested in taking over ited to making one The machines are owned by PanAmericano. payment of as much Cardtronics, the worlds largest non- as 600,000 Jamaican bank owner of ATMs, said Bethesda, Santander Chile Planning to dollars ($7,080) for Increase Loans to $5.5 Billion each trust account. McKain Md.-based Allpoint. The company The changes give each File Photo: JDIC. already has ATMs in the United The Chilean unit of Banco Santander is individual depositor States, Britain and Australia and says planning to increase loans to $5.5 billion in the trust protection for that amount. it operates the worlds largest sur- this year as it works to attract more clients "Now we can recognize each beneficiary, charge-free ATM network. to the bank, Santander Chiles president rather than just the trustee," said theCopyright © 2011, Inter-American Dialogue Page 2 of 6
  3. 3. Inter-American Dialogue’s Financial Services Advisor January 13-26, 2010JDICs chief executive offer, Antoinette Featured Q&AMcKain. In addition, the changes also Continued from page 1allow depositors to make separate claims themselves from holdings –either finan- too. The mandatory divesture of finan-if they have accounts in two or more cial or nonfinancial, according to their cial assets would severely damage localinstitutions that are forced to merge preference. Much would also depend on investment in small markets likeunder distressed circumstances. how the constitutional mandate would Ecuador. Financial regulation is a techni-Claimants must file for compensation be regulated through laws, and the latter cal issue that should not be decided bywithin two years of any mergers. "We have through regulations." referendums. The solvency risk to avoidbeen trying to get these changes in place Franco Moccia, member of the Afor a long time now," said McKain. Financial Services AdvisorChiles CorpBanca Reports 38.7% board, consultant and formerIncrease in Profit for 2010 president of Citibank Ecuador: "Technical and regulatory matters, such “ Financial regulation is a technical issue that should not beChilean bank CorpBanca, the countrys as financial regulations, are unlikely to befifth largest in terms of loans, said Jan. 14in a preliminary earnings report it a had effective if they are set by national refer- endums. Would other financial regula- decided through referendums. ” — Franco Moccianet income of $241.5 million for the year tion matters such as mandatory cash2010, a 38.7 percent increase from the requirements, net worth needs etc. beprevious year, Dow Jones reported. discussed at a national level and decidedEarlier this month, CorpBanca said it will via referendums too? Efficient capitaluse a planned $750 million capital markets have independent financial channeling deposit money to companiesincrease to boost lending to large Chilean authorities with technical skills to deal related to banks owners is effectivelycorporations, Bloomberg News reported. with these issues. Almost everywhere an regulated by tools different than pro-Banco do Brasil is in negotiations with interest rate cap would be approved by a hibiting financial institutions owners toCorpBanca over the investment. referendum creating the severe market have assets in other industries. The distortion in a competitive financial Ecuadorean government initiative looksCredit Card News market. Financial regulation to avoid lending to related parties is standard in like a political battle against specific financial institutions rather than a regu- financial markets and is designed to latory matter and, if approved, will nega-Inflation, Peso Shortage Drive Up avoid solvency problems. The risk is mit- tively impact local and foreign directArgentine Credit Card Debt igated by setting a very small percentage investment." of the bank net worth to be lent to relat- César Coronel Jones, founding AAccelerating inflation and a shortage of ed parties vis-à-vis a bigger percentagepesos in Argentina is driving Argentines allowed for unrelated borrowers. The partner at Coronel & Pérez incredit card debt to record levels as con- related parties definition goes from per- Guayaquil, Ecuador: "At thesumers meet difficulties finding cash to centage of direct and indirect ownership moment, President Correaspurchase goods, Bloomberg News report- to financial supervisor opinion. Small referendum has high possibilities of beened Jan. 24. In December, Argentines capital markets usually have local con- approved due to the presidents highcharged 26 billion pesos ($6.6 billion) on glomerates with portfolios diversified in popularity and the significant political different industries and usually have capital that is invested in the referen- financial institutions in their portfolios dum. However, there is a risk that the Continued on page 6 Private economists believe Argentinas annual the United States, which stands at 14 per- high as 27 percent. "It makes sense to use rate of inflation is as cent. Soaring consumer prices are push- credit cards because, first, you dont have ing down the savings rate in Argentina, the cash but, on top of that, real rates are high as 27 percent. where borrowers are wary of banks in the so negative, and sometimes there are pro- wake of the governments $95 billion debt motions where you pay for purchases default a decade ago, Daniel Volberg, an over 12 months," Boris Segura, an econo-credit cards, a 49 percent increase from economist at Morgan Stanley in New mist at Nomura Securities Internationalthe same month a year earlier, according York, told Bloomberg News. The govern- in New York, told the news service.to the central bank. Argentine credit cards ment said annual inflation totaled 10.9 Climbing prices for food and commodi-carry an average interest rate of 30.5 per- percent last year, but private economists ties, along with the U.S. Federal Reservescent, more than twice the average rate in believe the actual rate of inflation is as printing of dollars to spur the U.S. econo-Copyright © 2011, Inter-American Dialogue Page 3 of 6
  4. 4. Inter-American Dialogue’s Financial Services Advisor January 13-26, 2010my are stoking inflation concerns aroundthe world. Subscriber NoticePolitical News Yoshihiro Sakai Joins Financial Services Advisor Board The Financial Services Advisor is pleased to announce that Yoshihiro Sakai, executiveDuvalier: Desire to Participate in vice president and chief financial officer of Microfinance International Corp. inReconstruction Spurred Return Washington has joined the Board of Advisors.Former Haitian dictator Jean-Claude Sakai joined Microfinance International last year after serving as"Baby Doc" Duvalier said Jan. 21 that he senior advisor and senior economist at the Development Bank ofreturned to Haiti on Jan. 16 so that he Japan, the Japanese governments finance arm. In that position, hecould participate in the impoverished was in charge of international business management and focusedcountrys reconstruction after its deadly largely on China.earthquake a year ago, the AssociatedPress reported. "When I made the deci- Prior to his work at the Development Bank of Japan, Sakai workedsion to come back to Haiti to commemo- as leader of corporate strategy and managing director of Nomurarate this sad anniversary with you, in our Sakai Holdings in both New York and Tokyo, where he designedcountry, I was ready for any kind of per- File Photo: MFI. Nomuras global management structure and global strategy.secution," Duvalier, 59, told reporters inPort-au-Prince. "But I believe that the Before that, Sakai worked for 15 years at the Bank of Japan, the countrys central bank,desire to participate by your side in this in several management, operational and executive positions. Sakai directed and wascollaboration for the national reconstruc- involved in negotiations with foreign monetary authorities on behalf of the centraltion far outweighs any harassment I could bank. He also was manager of the banks Financial and Payment System Office andface." A Haitian court is currently weigh- senior examiner in the Banking Supervision Division and an officer of market opera-ing whether Duvalier should be tried on tion in the Credit and Market Management Department. In addition, Sakai has been a fellow of the American Enterprise Institute and an adjunct fellow of the Center for Strategic and International Studies. He earned a mas- ter of business administration from the Stern School of Business at New York University and a masters degree in criminal justice from Boston University. Saturday with Dominican President Brazil to Create Nationwide Leonel Fernández to discuss Haitis Disaster Prevention System cholera epidemic and political crisis. TheDuvalier countrys political future remains in In the wake of floods and mudslides thatFile Photo: Le Nouvelliste. question after the inconclusive first- are confirmed to have killed more than round presidential election Nov. 28. A 800 people in areas north of Rio decharges including corruption, embezzle- runoff that had been scheduled for Jan. 16 Janeiro, Brazil will create a new disaster-ment and torture. The charges stem from was postponed and has not been resched- prevention system, officials said Jan. 20,his 1971-1986 rule, which ended with his uled. On Jan. 21, the U.S. State the Associated Press reported. In addi-flying into exile following a popular Department revoked the visas of about a tion, the countrys government willrevolt. He has spent most of the past 25 dozen Haitian government officials in an spend $6.7 billion through 2014 onyears in France. Since his return to Haiti, effort to pressure the government to drop drainage and other similar projects in anDuvalier has largely remained holed up in its preferred candidate, Jude Célestin, attempt to prevent future flooding, saida Port-au-Prince luxury hotel and in a from the presidential ballot. An Planning Minister Miriam Belchoir. "Weprivate residence. Haitian President René Organization of American States review will prioritize those places where expertsPréval said Jan. 22 in the Dominican found that former first lady Mirlande say the problems are most serious,"Republic that Duvalier was within his Manigat and popular singer Michel Belchoir said in a statement, the APrights to return to Haiti, but added he "Sweet Micky" Martelly were the top vote- reported. The government will investmust now face justice. "If Duvalier is not getters in the first round and should $5.9 billion on initiatives to improvein prison now, it is because he has not yet advance to the runoff instead of Célestin. drainage and the remainder on hillside-been tried," said Préval, the AP reported. Préval last week was reportedly displeased stabilization projects. Municipalities thatPréval and Haitian Prime Minister Jean- by the OAS report but he has not publicly submit plans for such projects will be eli-Max Bellerive met for four hours commented on it. gible to receive about half of that fund-Copyright © 2011, Inter-American Dialogue Page 4 of 6
  5. 5. Inter-American Dialogue’s Financial Services Advisor January 13-26, 2010ing, Belchoir added. Every year, Brazil new controls to stem the flow of weapons POLITICAL & ECONOMIC BRIEFSsuffers widespread floods and mudslides, into Mexico as part of its efforts to helpbut the disasters that have occurred in Mexico fight the cartels. The administra- Cuba Halts Mail Deliveriesthe past week could become the worst tion is committed to "doing what could be to the United Statesnatural disaster the country has ever done" to require U.S. gun dealers near the Cubas state postal servicefaced. In addition, a new early-warning announced Jan. 21 that it has sus-system will use radar and a recently pur- pended deliveries to the Unitedchased supercomputer to help authori- States as a result of security meas-ties monitor severe weather, providing ures that have led to the return of authorities more time to order evacua- “ The drug traffickers are U.S.-bound mail to the island, not going to give up without Agence France-Presse reported. tions if necessary, said Mercadante, Aloízio the a terrible fight. ” Direct mail service between the two countries was halted in 1963, but — Hillary Clinton countrys science and talks in 2009 led to deliveries routed technology minister. through Mexico and Canada. State The government has Department officials said the UnitedMercadente not yet determined States has not imposed new restric-File Photo: Brazilian the systems cost, he Mexican border to report instances in tions on Cuban mail and that serv-Government. told radio reporters which buyers purchase several high-pow- ice interruptions are likely due to in an interview. On ered rifles, the cartels weapon of choice. third country air carriers inabilityJan. 19, the World Bank said it may fund Already, Washington has provided Mexico to transport additional mail.a project to reform Brazils civil-defense hundreds of millions of dollars in sup-system. In addition, the bank will provide port, including training and technology, Guatemala Extends State of Siegea loan of $485 million to reconstruct and this year will provide the country an in Violence-Plagued Provincehomes after this months flooding and additional half-billion dollars worth ofalso relocate people living in areas at risk equipment and training. Since Mexican Guatemala will extend a month-of floods and mudslides. The death toll President Felipe Calderón launched his long state of siege that began onafter the floods are expected to reach offensive against the cartels at the begin- Dec. 19 in the province of Alta1,000, said Mercadente, who added 5 mil- ning of his term in late 2006, more than Verapaz for an extra month, thelion people live in at-risk areas. 34,600 people have been killed in drug- Associated Press reported Jan. 18. related violence in Mexico. Guatemalan President ÁlvaroClinton Urges Mexico to Keep Colom said the efforts have beenFighting Messy Drug War Economic News successful but "more needs to be done" in the area, which was takenDuring a visit to the central Mexican city over by Mexicos Zetas drug gang inof Guanajuato, U.S. Secretary of State Brazils Central Bank Hikes Key 2008. The siege allows the army toHillary Clinton on Jan. 24 urged Mexicos Interest Rate to 11.25 Percent conduct searches and detain sus-government to continue fighting what shecalled its "messy" war against drug cartels, Brazils central bank on Jan. 19 raised its pects without warrants, ban gunthe Associated Press reported. "It is messy. benchmark overnight rate a half point to possession and control local media.It causes lots of terrible things to be on the 11.25 percent, beginning a series of rate Mexicos Central Bank Keepsnews," Clinton said after a meeting with increases amid rising concerns about Benchmark Rate at 4.5 Percenther counterpart, Mexican Foreign inflation and a strengthening real,Minister Patricia Espinosa. Mexico has no Bloomberg News reported. The banks Mexicos central bank on Jan. 21alternative other than fighting drug traf- policy committee, led by new central voted to keep its benchmark interestfickers head-on, said Clinton. "The drug bank chief Alexandre Tombini, voted rate at 4.5 percent, saying that infla-traffickers are not going to give up with- unanimously to boost the Selic rate for tion would continue to slow thisout a terrible fight. And they do things the first time since July. Inflation grew year despite an increase in globalthat are just barbaric—like beheading more last month than economists had commodities prices, Bloombergpeople," she said. "It is meant to intimi- expected. The year-end inflation rate News reported. Luis Flores, an econ-date. It is meant to have the public say, stood at 5.91 percent, the fastest calen- omist at Ixe Grupo Financiero, toldJust leave them alone and they wont dar-year rate since 2004 when inflation the news service that the probabilitybother me. But a president cannot do increased 7.6 percent. The central banksthat." Clinton also said the administration target for inflation is 4.5 percent, plus or of a rate increase will begin to riseof U.S. President Barack Obama will use minus two percentage points. in six or seven months.Copyright © 2011, Inter-American Dialogue Page 5 of 6
  6. 6. Inter-American Dialogue’s Financial Services Advisor January 13-26, 2010Featured Q&A Financial Services AdvisorContinued from page 3 is published biweekly by theopposition will find in the referendum banking sector per se. After years of eco- Inter-American Dialogue Copyright © 2011an opportunity to consolidate them- nomic and political turmoil, Ecuador isselves and that a "No" campaign, sup- in the midst of an ongoing media war. Erik Brand General Manager, Publishingported by various sectors, will take shape The private media remains concentrated ebrand@thedialogue.organd backfire against the president. The in the hands of a limited number of Gene Kuletafact that the referendum also includes powerful conglomerates, some with both Editorother sensible issues, like the reorganiza- financial sector and media sector inter- gkuleta@thedialogue.org ests. The conflict is part of an overall bat- Rachel Sadon tle between the left-populist government Reporter, Assistant Editor “ The possible approval of and the traditional economic elite. President Correa is highly sensitive to rsadon@thedialogue.org this referendum could media criticism and views the media as Inter-American Dialogue significantly change Ecuadors the primary opposition force. The presi- dent is an astute campaigner and will Michael Shifter, President business climate. ” likely garner enough support to pass the referendum. The proposed change is Peter Hakim, President Emeritus — César Coronel Jones Katherine Anderson, V.P., Finance & Administration likely to have less of an impact on the banking system than the overall eco- Genaro Arriagada, Senior Fellowtion of the judiciary and provisions to nomic environment and changes that Joan Caivano, Director, Special Projectsexert more control over the media, could have already been forced upon the bank- Paul Isbell, Visiting Senior Fellowprovoke a negative reaction and consoli- ing system in Ecuador. While the finan- Claudio Loser, Senior Fellowdate opposition forces against President cial system has enjoyed steady deposit Nora Lustig, Senior FellowCorrea. As for the possibility of prohibit- and credit growth during the past sever-ing banks, their main shareholders and al years, we expect the pace of growth to Aurea Molto, Fellowdirectors from controlling different busi- slow significantly in 2011-12 as a result Manuel Orozco, Director, Remittancesnesses, the impact could be very signifi- of general uncertainty about economic and Development Programcant. Many groups have assets in stocks policy, as well as policies that are specifi- Tamara Ortega Goodspeed, Seniorthat allow them to control or have signif- cally detrimental to the banking system. Associate, Educationicant presence in banks and this new law In 2007, the government passed a law Marifeli Pérez-Stable, Senior Fellowwill force them to sell their stock in aimed at lowering costs in the banking Jeffrey Puryear, Vice President, Social Policybanks. Likewise, many important banks system by establishing maximum inter- Viron Vaky, Senior Fellowand their shareholders or directors con- est rates and eliminating commissions.trol commercial, industrial and agricul- In 2010, the governments interventionstural enterprises and this new law will included a new requirement that banks The Inter-American Dialogues Financialforce them to get rid of those businesses bring onshore liquid assets that they Services Advisor is published biweekly, withor resign their bank positions. In sum, hold abroad. The banking system suffers the exception of major holidays, fromthe possible approval of this referendum from a poor payment culture. The diffi- 1211 Connecticut Avenue, Suite 510could significantly change Ecuadors culty in recovering loans and collateral Washington, DC 20036 Phone: 202-822-9002 Fax: 202-822-9553business climate. Bankers will have to leads banks to roll over problem loans www.thedialogue.orgconcentrate their investments in that rather than fully provision for them,sector and wont be allowed to invest in which raises costs for banks. An extra Subscription Inquiries are welcomed atother economic sectors. This could burden for private banks is that freetrial@thedialogue.orgencourage them to invest in foreign President Correa has actively sought to The opinions expressed by the members of the Boardcountries. Also, many nonfinancial com- expand the role of public sector banks in of Advisors and by guest commentators do not nec-panies wont be able to associate with Ecuador. Historically debtors have selec- essarily represent those of the publisher. The analysisbanks in order to obtain investment." tively chosen to repay loans to private— is the sole view of each Advisor and does not neces- not public—banks. This could signal sarily represent the views of their respective employ- Richard Francis, director of ers or firms. The information in this report has beenA problems for Ecuador down the road." obtained from reliable sources, but neither its accu- sovereign ratings at Standard racy and completeness, nor the opinions based there- and Poors in New York: "The on, are guaranteed. If you have any questions relating real aim of the proposed The Advisor welcomes reactions to the to the contents of this publication, contact the edito-change deals more with the long-stand- Q&A above. Readers can write editor rial offices of the Inter-American Dialogue. Contentsing struggle between President Correa Gene Kuleta at gkuleta@thedialogue.org of this report may not be reproduced, stored in a retrieval system, or transmitted without prior writtenand the national media and less with the with comments. permission from the publisher.Copyright © 2011, Inter-American Dialogue Page 6 of 6

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