<p>Q1: For example, do banks in Ecuador and Panamá have accounts/reserves in the US Federal Reserve?</p>
<p>A1:</p>
<p>No they don't only depository institutions that fall under Federal Reserve Act [FRA] are eligible,  and FRA only applies to US banks (<a href="https://www.frbsf.org/banking/about/what-we-do/accounts-services/" rel="nofollow noreferrer">Federal Reserve of San Francisco</a>).</p>
<p>Q2: Is a USD bank deposit in Ecuador equivalent to an USD deposit in the US? Is it possible to transfer USD of a bank in Ecuador to a bank in the US at face value?</p>
<p>A2:</p>
<p>Yes and no. Nominally yes it is completely equivalent, \$1 bill is \$1 bill everywhere in the world.</p>
<p>But the real purchasing money differs. So in terms of purchasing power they are not equivalent. One dollar does not have the same purchasing power in New York that it has in Kentucky, and one dollar does not have the same value in Panama that it has in US.</p>
<p>Also if your account is not subject to some restrictions, for example your money is not frozen by government because you are suspect in some illegal activity, you can transfer money from Panama to US. You will have to pay bank fees but there is no exchange rate between Panama US dollar and US US dollar.</p>

CC BY-SA 4.0
2022-01-03T22:39:27.403Z
My second question was regarding the deposits, not the bank notes.
Tripanosomagambiense
CC BY-SA 4.0
2022-01-03T22:54:24.457Z
In Europe a deposit in EUR in Germany is as good as a deposit in EUR in Italy. It is possible to make bank transfers from the bank of Italy to the bank of Germany because the central banks of both Germany and Italy are linked to the European Central Bank.

My question is if this is possible at all with dollars in a bank of Ecuador or Panamá. If it is possible to transfer them to a bank in US.

How is it possible to control that a bank in non-US country creates dollars in a deposit out of thin air if not supervised by FR?
Tripanosomagambiense
CC BY-SA 4.0
2022-01-09T02:23:03.223Z
@Tripanosomagambiense transfers between Germany and Italy are not made via ECB. Yes it is possible to transfer them. Banks can only create dollars in deposits if they can get Fed reserves, since banks in Panama can't do that they cannot create dollars out of thin air.
csilvia
CC BY-SA 4.0
2022-01-09T02:58:52.913Z
Transfers in EU are done using SEPA. ECB helped to draw the regulation but the transactions are done between private banks.
csilvia
CC BY-SA 4.0
2022-01-03T12:04:11.497Z
2022-01-03T12:04:11.497Z
csilvia
<p>I am interested in the working of the banking system in countries that don't have their own currency, e.g., Ecuador or Panamá. Can you point me to studies or articles about it?</p>
<p>For example, do banks in Ecuador and Panamá have accounts/reserves in the US Federal Reserve?</p>
<p>Is a USD bank deposit in Ecuador equivalent to an USD deposit in the US? Is it possible to transfer USD of a bank in Ecuador to a bank in the US at <em>face value</em>?</p>

<banking><central-banking><currency-exchange>
Banking system in countries without their own currency
Tripanosomagambiense
# Banking system in countries without their own currency

(Asked by: username_0 on 2021-12-28)

I am interested in the working of the banking system in countries that don't have their own currency, e.g., Ecuador or Panamá. Can you point me to studies or articles about it?

For example, do banks in Ecuador and Panamá have accounts/reserves in the US Federal Reserve?

Is a USD bank deposit in Ecuador equivalent to an USD deposit in the US? Is it possible to transfer USD of a bank in Ecuador to a bank in the US at *face value*?

**Tags:** banking, central-banking, currency-exchange


---

## 1 answers

### Answer by username_1 on 2022-01-03. Score: 1

Q1: For example, do banks in Ecuador and Panamá have accounts/reserves in the US Federal Reserve?

A1:

No they don't only depository institutions that fall under Federal Reserve Act [FRA] are eligible, and FRA only applies to US banks ([Federal Reserve of San Francisco](https://www.frbsf.org/banking/about/what-we-do/accounts-services/)).

Q2: Is a USD bank deposit in Ecuador equivalent to an USD deposit in the US? Is it possible to transfer USD of a bank in Ecuador to a bank in the US at face value?

A2:

Yes and no. Nominally yes it is completely equivalent, \$1 bill is \$1 bill everywhere in the world.

But the real purchasing money differs. So in terms of purchasing power they are not equivalent. One dollar does not have the same purchasing power in New York that it has in Kentucky, and one dollar does not have the same value in Panama that it has in US.

Also if your account is not subject to some restrictions, for example your money is not frozen by government because you are suspect in some illegal activity, you can transfer money from Panama to US. You will have to pay bank fees but there is no exchange rate between Panama US dollar and US US dollar.

> **Comments:**
> **username_0**: My second question was regarding the deposits, not the bank notes.  
> **username_0**: In Europe a deposit in EUR in Germany is as good as a deposit in EUR in Italy. It is possible to make bank transfers from the bank of Italy to the bank of Germany because the central banks of both Germany and Italy are linked to the European Central Bank.  My question is if this is possible at all with dollars in a bank of Ecuador or Panamá. If it is possible to transfer them to a bank in US.  How is it possible to control that a bank in non-US country creates dollars in a deposit out of thin air if not supervised by FR?  
> **username_1**: @username_0 transfers between Germany and Italy are not made via ECB. Yes it is possible to transfer them. Banks can only create dollars in deposits if they can get Fed reserves, since banks in Panama can't do that they cannot create dollars out of thin air.  
> **username_1**: Transfers in EU are done using SEPA. ECB helped to draw the regulation but the transactions are done between private banks.  

---

