QUITO May 30 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.
(Reporting by Alexandra Valencia; Writing by Alonso Soto;
editing by Paul Simao)