Featured Product

    IMF Report Examines Developments in Banking Sector in Argentina

    April 05, 2019

    IMF published a staff report highlighting that the banking system in Argentina remains resilient. The report, which is part of the third review under the stand-by arrangement with Argentina, shows that loan provisioning is at high levels, with provisions for nonperforming loans (NPLs) at 87%. The assessment highlights that, despite a generally resilient banking system, there is room to strengthen supervisory practices.

    In the banking sector, the system-wide tier 1 capital ratio is at 14.2%. Liquidity is ample due to high remunerated and unremunerated reserve requirements and a shrinking loan portfolio, with the liquid assets to deposits ratio rising to more than 50%. The banking regulator BCRA conducts regular stress tests on the banking system, yet the credit risk models are suited to assess exposure of large universal banks to shocks. However, work is underway to fine-tune stress testing models to better customize capital and liquidity requirements for smaller institutions, taking into account their funding structure and activities. These smaller institutions are non-systemic, account for 1.1% of the banking sector assets, and have a very small share of retail deposits (relying instead on wholesale funding and term deposits). Private-sector NPLs are rising but were only 3% in December, mostly concentrated in revolving credit to households and loans to construction firms. Mortgage defaults also remain at very low levels (0.3%).

    The report notes that revisions to the BCRA charter would strengthen independence and operational autonomy of the central bank. The authorities have made good progress in designing amendments to the Central Bank Law, which establishes price stability as the first and fundamental mandate of BCRA and allows remuneration of commercial bank accounts held at the BCRA. The objectives of the new charter are to improve governance, internal oversight, and decision-making structures and to commit the central bank to the international standards of transparency and accountability. 

     

    Related Link: Staff Report

    Keywords: Americas, Argentina, Banking, NPLs, Stress Testing, Regulatory Capital, Credit Risk, BCRA, IMF

    Featured Experts
    Related Articles
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    BoE Announces Changes to Validation Rules for Form BTL

    The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.

    July 20, 2021 WebPage Regulatory News
    News

    BCBS Proposes Changes to Process for Reviewing G-SIB Methodology

    The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.

    July 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7281