Featured Product

    IMF Assesses Implementation of Basel Core Principles in Peru

    December 14, 2018

    IMF published its report on the detailed assessment of observance on the Basel Core Principles for Effective Banking Supervision (BCPs) in Peru, under the Financial Sector Assessment Program (FSAP). The report reveals that the overall quality of the country's supervisory approach and regulation of the banking sector is strong.

    The report highlights that SBS, the Superintendence of Banks, Insurers and Private Pension Funds, has followed up on most of the recommendations made in 2011 BCP assessment. Significant progress has been made on the implementation of the Basel regulatory reform agenda. While the implemented methodology for the capital conservation buffer, countercyclical buffer, and the buffer and framework for domestic-systemically important banks (D-SIBs) is different than that of the Basel framework, the developed approach, tailored to the local characteristics of the financial system, aims to achieve the same objectives. A remaining substantive difference is the use of the Basel II capital definition, which is embedded in the General Financial System Law (LGSF). SBS has implemented the liquidity coverage ratio (LCR), is in process of implementing (tailored to the local characteristics) the net stable funding ratio (NSFR), and has incorporated, in its regulatory framework, the Basel guidelines for corporate governance.

    Out of the 29 BCPs, Peru was assessed as compliant with 15 principles, largely compliant with 13 principles, and materially non-compliant with one principle. In the context of noncompliance, a material shortcoming was identified in the Peruvian legal framework. The supervisory powers are limited regarding direct access to parents and affiliates, including their subsidiaries all being outside of the direct supervisory perimeter. Such legal limitation is of particular concern since two Peruvian (in terms of main shareholders, activities, and management) conglomerates with foreign holding companies, for which the SBS is operating de facto as the home supervisor, are systemic. Finally, while ownership and group structures are transparent and SBS has a sound supervisory approach toward related party and intra-group lending, the supervisory approach used to assess financial group’s governance, capital, and overall risk management and liquidity risk management needs enhancement.

     

    Related Link: Report on Assessment of BCPs

    Keywords: Americas, Peru, Banking, BCP, DAO, FSAP, Basel Framework, Systemic Risk, IMF

    Featured Experts
    Related Articles
    News

    ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks

    ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.

    September 18, 2020 WebPage Regulatory News
    News

    EBA Provides Opinion on Definition of Credit Institution in CRR

    EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).

    September 18, 2020 WebPage Regulatory News
    News

    APRA Consults on Alignment of Daily Liquidity Report for Banks

    APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.

    September 17, 2020 WebPage Regulatory News
    News

    FED Releases Scenarios for Second Round of Stress Tests on Banks

    FED released hypothetical scenarios for a second round of stress tests for banks.

    September 17, 2020 WebPage Regulatory News
    News

    PRA Announces Update on Supervisory Benchmarking Portfolio Exercise

    PRA published updates in relation to the 2021 Supervisory Benchmarking Portfolio exercise.

    September 14, 2020 WebPage Regulatory News
    News

    FED Revises and Extends Capital Assessment and Stress Testing Reports

    FED adopted a proposal to extend for three years, with revision, the capital assessments and stress testing reports (FR Y-14A/Q/M; OMB No. 7100-0341).

    September 14, 2020 WebPage Regulatory News
    News

    HKMA Updates Policy Module for Non-Centrally Cleared OTC Derivatives

    HKMA revised the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.

    September 11, 2020 WebPage Regulatory News
    News

    EBA Updates List of Validation Rules for Reporting by Banks

    EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.

    September 10, 2020 WebPage Regulatory News
    News

    EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework

    EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).

    September 10, 2020 WebPage Regulatory News
    News

    NGFS Advocates Environmental Risk Analysis for Financial Sector

    NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.

    September 10, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5803