COSEDE establishes new methodology for the minimum liquidity balance between trusts

The General Management of the Deposit Insurance, Liquidity Fund, and Private Insurance Fund Corporation (COSEDE) approved the methodologies that define the minimum balance that triggers loans between the trusts of the Liquidity Fund, for both the private financial sector and the popular and solidarity sector. The decision is contained in resolutions COSEDE-COSEDE-2026-0064-R and COSEDE-COSEDE-2026-0065-R, signed on October 1, 2026, and published in Official Registry No. 391 on Friday, October 16, 2026. This completes the replacement of the methodologies in effect since 2023 and establishes a quarterly review of the threshold that triggers loans between the fund’s two trusts.

The Liquidity Fund, regulated in articles 333 to 338 of the Organic Monetary and Financial Code, acts as a lender of last resort and operates through two independent commercial trusts: one for the private financial sector and another for the popular and solidarity sector. According to article 2 of resolution JPRF-F-2025-0164, the contributors to the former are private banks; those to the latter are segment 1 savings and credit cooperatives, mutual savings and credit associations for housing, and central funds. COSEDE administers the fund by mandate of numeral 2 of article 80 of the same code.

Article 28 of resolution JPRF-F-2025-0164, issued by the Financial Policy and Regulation Board on September 2, 2025, and in effect since October 6 of that year, enabled loans between trusts when the requesting trust anticipates that its liquid resources will fall below its minimum balance as a result of requests for extraordinary loans. That same article provides that the minimum balance is established by the COSEDE Administration and is reviewed quarterly. The corporation’s Board of Directors had repealed the previous methodologies through resolution COSEDE-DIR-2026-023 of July 30, 2026, which nullified resolutions COSEDE-DIR-2023-011 and COSEDE-DIR-2023-012, both dated March 15, 2023.

Two parallel resolutions for each segment

The regulations were published as separate instruments, one for each trust, although with equivalent structure and scope:

• COSEDE-COSEDE-2026-0064-R, for the Liquidity Fund of the Popular and Solidarity Financial Sector, supported by Reserved Report No. CTRE-MET-FLSFPS-2026-009 dated October 1, 2026.
• COSEDE-COSEDE-2026-0065-R, for the Liquidity Fund of the Private Financial Sector, supported by Reserved Report No. CTRE-MET-FLSFP-2026-008 of the same date.
• Both reports were submitted to the General Management via memorandum COSEDE-CTRE-2026-0122-M, prepared by the Technical Coordination of Risks and Studies.
• Legal viability was issued through reports CTPSF-UPN-0117-2026 and CTPSF-UPN-0116-2026, from the Technical Coordination of Insurance and Fund Protection.
• Both resolutions are signed by Silvana Raquel Salazar Torres, General Manager of COSEDE.

The technical content of the methodologies is contained in reports classified as reserved; therefore, the calculation formula for the minimum balance is not detailed in the published text; the Official Registry only reproduces the approving articles and the legal considerations.

The conditions already governing loans between trusts

Article 28 of resolution JPRF-F-2025-0164 sets the general parameters for these operations, which are activated when the requesting trust anticipates falling below its minimum balance:

• Term of up to 180 days.
• Amount that cannot exceed 20% of the available equity of the trust granting the loan.
• Interest rate equivalent to the reference active rate in effect at the time of granting, published by the Central Bank of Ecuador.
• Guarantee constituted by assets of the requesting trust totaling at least 140% of the total credit value, instrumented in a guarantee trust prior to disbursement.
• Approval by the Board of Directors of COSEDE within a period not exceeding five days from the Management’s request.

Mandatory quarterly review

Article 2 of both resolutions orders the Technical Coordination of Risks and Studies to present a technical report to the General Management quarterly with the results of the update carried out according to the approved methodology. The final provision establishes that the resolutions enter into force from their issuance, without prejudice to their publication in the Official Registry.

The adjustment is important because the minimum balance is the trigger for loans between the two trusts of the Liquidity Fund, the mechanism used to cover liquidity deficiencies of banks, segment 1 cooperatives, mutuals, and central funds without resorting to fiscal resources. With the quarterly review, the threshold ceases to be a fixed parameter and is updated periodically, which directly affects the support capacity for deposits and the operation of the lender of last resort.

Source: Official Registry No. 391, Friday, October 16, 2026, Section I, pages 41 and 47 (official references: COSEDE-COSEDE-2026-0064-R and COSEDE-COSEDE-2026-0065-R).