QUITO -(Dow Jones)- Members of Ecuador's banking sector expressed concern Friday that the left-leaning government's financial policies are putting the country's financial system in jeopardy.
"Stability could be lost from the negative effects that the financial security law and tax reforms will cause," said the Private Banks Association of Ecuador in a statement.
On Dec. 17, a temporary legislative commission, which will operate until a new Congress is elected next year under the new constitution, approved a 0.084% tax on funds and investments outside of the country.
The commission also approved an increase to 1.0% from 0.5% on the tax of taking funds out of the country.
Instead of generating money for Ecuador, Rodrigo Espinosa, an independent economic consultant said it "instead, provides an incentive for companies and the banking sector to maintain resources outside of the country."
Fernando Pozo, the association's president, said that industry executives may seek to talk with the government on the issue.
"We're open to having a dialogue with the government, but we have the responsibility to say that things are not going well," Pozo said.
Pozo added that the government should adjust its 2009 budget and repeal certain taxes on the banking industry.
On Thursday, President Rafael Correa admitted that "hard times are ahead for the country," particularly because of falling oil prices.
Ecuador is South America's fifth-largest oil producer with a daily production of around 500,000 barrels a day.
-By Katerine Erazo, Dow Jones Newswires; 5938-4638-528; mercedes.alvaro@dowjones.com
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Publié le 19 Décembre 2008 Copyright © 2008 Dowjones