Banking sector rejects referendum proposal to increase ownership restrictions

Monday, January 31, 2011

Ecuador's banking sector is firing back at President Rafael Correa's proposal for a national referendum on prohibiting, among other things, banks and bank shareholders from owning other non-bank businesses.

A press release issued by private sector banking association ABPE and signed by executive director César Robalino argues that such a restriction would violate several articles of the constitution.

"The question isn't necessary because there are already laws prohibiting banks from carrying out tied operations, such as giving loans to their shareholders, management and their other businesses," the release said.

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The press release calls on the country's supreme court to reject the proposed referendum.

Correa submitted a total of 10 questions that would appear on the referendum to the supreme court, which will rule on their constitutionality. Other questions propose banning gambling and prohibiting animal cruelty for recreational purposes.

Ecuador recently enacted a law preventing banks and bank shareholders from owning media outlets.