The economist Jean Carlos Altuna proposes creating a Public Trust to guarantee deposits in Dominican cooperatives. This initiative arises in the midst of financial system modernization, protecting hundreds of thousands of savers who trust their resources in this key sector of the local economy.
Altuna, in a recent analysis, highlights that the Public Trust would act as a technical and credible mechanism to ensure deposits without interfering with the daily operation of cooperatives. The fund would be activated only in cases of resolution or liquidation, offering a trust umbrella for users and disciplining risk management.
Context of financial modernization
The Central Bank of the Dominican Republic (BCRD) drives the regulation of cooperatives with financial intermediation before the Executive Power, transferring its supervision to the Superintendence of Banks (SB). The remaining ones would be under a strengthened Idecoop, aligning with recommendations from the International Monetary Fund (FMI). This step responds to urgent debates about protecting savings in a sector that handles billions of pesos.
Details of the Public Trust scheme
Financing and operation
The Idecoop would act as the initial trustee, in coordination with the Ministry of Finance, the BCRD, and the SB. Financing would be based on differentiated risk premiums ex-ante, calculated on insurable deposits, with multi-year reserves and a state contingent line for extreme crises. Benefits include increased confidence of savers, reduced risk of contagion, and healthy competition, rewarding good corporate governance practices.
- Strengthening the legitimacy of the financial system.
- Reduction of costs in future adverse events.
- Immediate implementation via trust, adaptable to new regulations.
Background and current relevance
Historically, cooperatives have faced crises like the one in 2008, where bankruptcies affected savings without robust guarantee mechanisms. Today, with over 500 active cooperatives and deposits exceeding 200 million dollars according to Idecoop data, the proposal gains urgency. Experts agree that a Public Trust would prevent bank panics and stabilize the sector, similar to funds in other Latin American countries.
Altuna emphasizes that delaying this protection increases future risks. The Public Trust does not add bureaucracy, but clear rules and a solid floor for cooperative growth. In a legally reviewed framework, this measure would promote financial inclusion in the Dominican Republic, measuring the solidity of the system by its ability to protect the common saver.
