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

    EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio

    EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.

    November 19, 2020 WebPage Regulatory News
    News

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.

    November 19, 2020 WebPage Regulatory News
    News

    IASB Begins First Phase of Post-Implementation Review of IFRS 9

    IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Report Examines Progress in Resolvability of Systemic Institutions

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.

    November 18, 2020 WebPage Regulatory News
    News

    EBA Benchmarks National Insolvency Frameworks Across EU

    EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Reports Assess Impact of Pandemic on Financial Stability

    FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.

    November 17, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Implementation of Capital Review Changes

    RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.

    November 17, 2020 WebPage Regulatory News
    News

    IASB Announces Andreas Barckow as the New Chair from July 2021

    The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.

    November 17, 2020 WebPage Regulatory News
    News

    HKMA Consults on Capital Rules for Bank Equity Investments in Funds

    HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.

    November 17, 2020 WebPage Regulatory News
    News

    ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA

    ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).

    November 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6153