Financial Safety Advice

Your financial security is not my financial security. The “women’s feelings about financial security seem to contribute to your satisfaction as much as they do their income, and, somewhat independent of income.”

So the financial security is directly linked to life satisfaction (as the study), but I think it is different for each person and depends on what each one wants in life.

Yes, every one of us has a different relationship with money and depends on our context, from what we were taught at home about money, to how much we have and what we need.

The definition of financial security varies depending on who was asked for one will have her own home, for another one million dollars in the bank, and one more will have enough to live for today. Read the rest of this entry →

With the approval of the Financial Security Act by the plenary of the Legislative Commission, the banking sector is concerned and unhappy, as some representatives of banks believe that the force is put at risk the profitability of the banks and that envisions a reduction in the volume of deposits and a contraction in the placement of credits that could be reduced by average 70% next year. According to the Association of Private Banks of Ecuador (ABPE), the profits of many banks will disappear.

The general manager of Banco Pichincha, Fernando Pozo, adding that these reforms, “coupled with economic measures antitechnic the Government, form a set of elements that are isolated to articulate but can eventually attack the solvency of the financial system.”

Similarly, Cesar Robalino, chief executive of the Association of Banks (ABPE), held that this document is not a technical support “to enable the banks to work with total independence.”

Moreover, Pozo said it is a grave mistake for the Fund of the Deposit Guarantee Agency (AGD) is administered by the State, since income will consist of the shareholders of the banks, not the contributions of depositors. Therefore, “the regime has no right to intervene,” he said.

But the legal document is more specific in stating that “after the extinction of the AGD within 12 months and up to six months renewable, assets, rights and powers shall be executed by the Ministry of Finance.”

Robalino said that these reforms do not reduce systemic risks nor create confidence in the financial market, because “to use these standards should establish clear policies on interest rates, tax incentives and economic policies that encourage production and investment,” said .

At another point, the rule states that state investments, banking and Social Security (IESS) pass through transparent markets or stock exchanges. The holder of the APBE added that a “financial network misconceived and can adversely affect the resources of both depositors and to banks.” (APB)

German Value Financial Security as a Very Important
Even if a majority of Germans believe it to be especially important to be financially secure, the interest for investments or pensions is only reinforced by any third party present. As shown by a recent study, but about 69 percent of Germans have no strong interest in financial issues. About money is spoken as a sequence in the little circle of friends or colleagues: All five percent of study participants said they often talk in these circles on the subject of money.

In the survey of the Forsake polling institute on behalf of Com direct Bank also declared 71 percent, directly through the credit crisis to feel affected. Effects on behavior in dealing with money had and restricted to 38 percent – after all, already at 17 percent more than in the previous year (21 percent).

The Comdirect Bank said the study “Customer-Motive 2010″ after the events of the spending. Many Germans gave everyday spending, debt repayment and savings plans in preference to the teller. Expenditure on leisure activities were considered less important than contrast. That was on a shopping spree the wallet at every second (49 percent) more strained than necessary. 13 percent said this to make then even if the current account is covered already. Men and women differed not so much here, so declared 51 percent of women and 46 percent of men, on a shopping spree on their account also aware overdraft.

The Government has announced the creation of a financial safety net. It has taken about eight years for the Ecuador look for mechanisms to prevent or manage at a lower cost a potential banking crisis. This reform is of great value and deserves to be supported by major stakeholders and those who do say in the country. From what is known, the financial safety net would include a liquidity fund, a limited deposit insurance and bank resolution mechanisms. The liquidity fund is critical of the lack of lender of last resort. Unable to deliver U.S. dollars the central bank, the country’s payment system does not have a backup that ensures long operation, so today, if a bank medium-and large-worse if into a crisis, this could spread like wildfire into a general banking crisis.

Deposit insurance is important to provide security for small depositors, often in numbers most bank customers, thus contributing to the stability of the financial system. It is also crucial to create bank resolution instruments that allow the orderly closure of troubled banks and limit the spread to other banks. Thus, if a bank becomes insolvent, the competent authority would remove shareholders and pass the deposits and good assets, the more money deposit insurance to a healthy bank, while the bad assets would go into liquidation.

It is essential that this reform is handled today, as the economy and financial system are stable. We must learn the lesson of the past, when they had to act in the midst of a crisis. For example, some bank resolution instruments already existed in the discredited AGD Act, but were never understood or used, in large part because they were born in the heat of a systemic banking crisis. The next step will be to make the new institutions work for the reform to be implemented. Furthermore, it should raise the quality of banking supervision and provide legal security to the officials who exercise so that they can act effectively and independently. Read the rest of this entry →