He president of the Central Bank of Uruguay (BCU), Diego Labatstated that the Uruguayan banking system could grow “much more” without this necessarily affecting its stability.
The head of the state body spoke this Wednesday on the topic at the VIII Finance Conference, organized by the Master’s and Postgraduate Unit in Economics (UMPE) of the University of Montevideo (UM).
“There is room for the Uruguayan banking system to have much more development, without losing stability,” he remarked. Labatsince you understand that Uruguay It has the capacity to transform itself into a regional financial services provider, so it would be important to adopt best practices in the matter.
Regarding this, he expressed that, today, fintech appears with a complementary role to banksbut he indicated that neither “they have the agility to innovate at the speed that the world requires today, nor do fintechs have the backing to provide trust, which in these services is absolutely key.”
For this reason, the head of the Central commented that the BCU It will need to have a level playing field in this regard, and send clear signals to the private sector to act accordingly.
“Uruguay has low credit levels”
On the other hand, Labat highlighted the fact that Uruguay It has low levels of credit, with a credit-GDP ratio in the order of 30%, which, in the economist’s opinion, is a low figure in comparison with other countries.
As for the banks, stated that these have accompanied the technological transformation in recent years, particularly at the digital level. “The idea of physical transformation is important, but citizens demand more and more and generate new changes,” she said.
Likewise, he assured that there are challenges at the cost level, since 20 years ago, for every 1 peso of operating cost, the bank invested 0.7 pesos, while now the figure increased to 1.3 pesos, something that for the hierarchy “goes against the grain of technological change” and is a point to take into account.
Source: Ambito
