From Stigma to Strategic Value: Trusts as a Tool for Managing Risk Portfolios

Abstract

In the Ecuadorian financial system, the administrative trust has been the subject of controversy, especially in its application to the management of impaired assets, such as past-due portfolios. Although the fiduciary structure offers technical, legal, and accounting advantages that allow for specialized management, its use has been delegitimized by inappropriate practices, lack of specific regulation, and negative institutional perceptions. This article analyzes the legal basis of trusts in Ecuador, their accounting treatment, the risks of contractual simulation, and their comparative use in other jurisdictions such as Spain, Mexico, and Colombia. Based on this analysis, it is argued that trusts, when properly structured and supervised, are a legitimate and effective tool for recovering assets, strengthening institutional solvency, and contributing to financial stability.

Keywords: Management trust, risk assets, financial system, asset separation, contractual simulation, fiduciary governance