Trends
Regarding regulation and supervision
- There is an ever growing belief in the region that intermediation with microenterprises should fall within the financial system supervised by the monetary authority, and that the legislation that governs this system should consider the specific nature of this business. All the signs suggest that the processes already under way will continue.
- A certain amount of concern has been raised about how to proceed when the number of institutions that intermediate with microenterprises, which should or wish to be supervised, is very high. In view of this situation, the dilemma is whether to include these institutions under the supervision of the central body, adopt a delegated or auxiliary supervisory arrangement, in both cases extending regulation to a larger number of small institutions, or uphold the current situation. Such cases may be found in countries such as Mexico in general, or other countries with cooperative institutions or a fragmented industry, either because the non-supervised institutions attract savings (Mexico, and a number of cooperatives in Ecuador and El Salvador) or because of the NGO’s lobbying for recognition by the superintendence. The first of these paths implies the risk of giving way to less stringent supervision or of swamping the superintendence or central bank. The second would require applying the utmost restrictions until there is no possibility that those institutions that are not suitably regulated and supervised, including cooperative institutions, can attract savings from the public, whether or not they are partners, and that in order to be protected by the supervisory body they will have to adopt one of the legal statuses already provided for in the legislation. It seems that the tendency in Latin America will be to follow the first of these two paths.
- It is to be expected that the financial crisis that began in 2007 will lead to a greater focus on the regulation and supervision of financial institutions, and most especially on those that manage people’s savings.
