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

    APRA Publishes Approach to Regulating and Supervising GCRA Risks

    APRA published an information paper that sets out a more intensive regulatory approach to transform governance, culture, remuneration, and accountability (GCRA) practices across the prudentially regulated financial sector.

    November 19, 2019 WebPage Regulatory News
    News

    IAIS Publishes Application Paper on Recovery Planning

    IAIS published the final application paper on recovery planning, along with the resolution of comments on the draft application paper.

    November 18, 2019 WebPage Regulatory News
    News

    FSB Publishes Summary of November Meeting of RCG for MENA Region

    FSB published a summary of the November meeting of the Regional Consultative Group (RCG) for Middle East and North Africa (MENA).

    November 17, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: Second Update for November 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to eight questions that relate to the Bank Resolution and Recovery Directive (BRRD) and the Capital Requirements Regulation and Directive (CRR and CRD).

    November 15, 2019 WebPage Regulatory News
    News

    FASB Delays Effective Dates for CECL, Leases, and Hedging Standards

    FASB issued two Accounting Standards Updates finalizing the delays in effective dates for standards on current expected credit losses (CECL), leases, hedging, and long-duration insurance contracts.

    November 15, 2019 WebPage Regulatory News
    News

    ESMA Updates Q&A on Securitization Regulation in November 2019

    ESMA updated questions and answers (Q&A) on the Securitization Regulation (Regulation 2017/2402).

    November 15, 2019 WebPage Regulatory News
    News

    HKMA Announces Finalization of Banking Liquidity Amendment Rules 2019

    HKMA issued a letter informing all authorized institutions that negative vetting of the Banking (Liquidity) (Amendment) Rules 2019 (BLAR) has now expired. Thus, the BLAR will now come into operation from January 01, 2020.

    November 15, 2019 WebPage Regulatory News
    News

    FSI Examines Use of Red Team Testing to Enhance Cyber Resilience

    The Financial Stability Institute (FSI) of BIS published a paper that examines the contribution of red team testing frameworks toward enhancing cyber resilience.

    November 15, 2019 WebPage Regulatory News
    News

    BCBS Consults on Revised Disclosures for Market Risk Framework

    BCBS launched a consultation on the revised disclosure requirements for the market risk framework for banks.

    November 14, 2019 WebPage Regulatory News
    News

    BCBS Consults on Disclosure Templates of Sovereign Exposures of Banks

    BCBS published a consultation on the voluntary disclosure templates related to sovereign exposures of banks.

    November 14, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4167