Regulatory Alerts2022-01-01 | JPRF-F-2022-042Resolution No. JPRF-F-2022-042 Amending Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities and Insurance Resolutions Regarding the Standard for the Establishment of Provisions for Risk Assets in Savings and Credit Cooperatives and Mutual Savings and Credit Associations for Housing
The Financial Policy and Regulation Board of Ecuador issued Resolution No. JPRF-F-2022-042 to amend the regulatory framework for the establishment of provisions for risk assets within the Popular and Solidarity Financial Sector. The resolution updates Article 62 to mandate generic provisions of up to 3% for credit portfolios exhibiting supervisory deficiencies, while establishing detailed risk categories (A through E) for investment instruments with corresponding provision requirements ranging from 5% to 100%. Additionally, it introduces transitional provisions for reclassifying 2020 generic provisions and sets specific rules for the valuation of fiduciary rights and the non-reversal of provisions from debt-for-asset swaps.
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