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Uruguay to upgrade financial markets regulation and supervision with IDB assistance

The Inter-American Development Bank approved a $4 million loan to help the Central Bank of Uruguay (BCU) improve financial regulation and supervision to provide better consumer protection and boost the financial system's stability and efficiency.

The funds will strengthen the role of the BCU's Financial Services Superintendency (SSF) that was created in 2008 and given ample regulatory and control authority over financial agents and services, including banks, insurance companies, securities firms, and pension savings funds (AFAPs).

The program will help improve the effectiveness and efficiency of the SSF in carrying out prudential and conduct-of-business financial regulation and supervision under an integrated institutional approach and in accordance with best international practices.

The IDB loan will finance the implementation of a strategic plan for the SSF, personnel training, introduction of new technology and adoption of international standards in all areas involved. In addition, the project will also support the implementation of an integrated approach for regulation and supervision, and the implementation of methods for dealing with consumer complaints.

The goals of the four-year program include:

  • The institutional structure will be adapted to allow effective and efficient integrated regulation and supervision consistent with a well-functioning financial safety net.
  • The regulatory framework will provide financial institutions with appropriate incentives.
  • Financial supervision will be based on comprehensive risk analysis and evaluation of financial institution performance.
  • Conduct-of-business regulation will provide better consumer protection and promote competition.
  • Consumer defense regulations for insurance, securities, and pensions sectors will be published.