Featured Product

    IMF Publishes Report on the 2018 Article IV Consultation with Honduras

    July 03, 2018

    IMF published its staff report under the 2018 Article IV consultation with Honduras. Directors welcomed the stability of the banking system and commended the progress made toward adopting Basel III standards. They recommended sustained implementation of the recommendations of the Financial Sector Stability Review (FSSR). Directors called for careful monitoring of household debt, the concentration of consumer loans in public pensions fund portfolios, and the expansion of development banks toward first-tier operations. They also underscored the need for a further strengthening of the anti-money laundering and combating the financing of terrorism (AML/CFT) framework.

    The report noted that the banking system remains sound and the credit gap is closed. Against the backdrop of improved financial conditions and lower risks, balance sheet buffers appear adequate. Non-performing loans (NPLs) to total loans remain historically low, profitability is high, and the leverage ratio, at 11%, is well below the crisis threshold rating. Meanwhile, balance sheet risks remain moderate. The report suggests that authorities should continue to implement the recommendations of the recent FSSR. Several FSSR recommendations have been completed, including production of a new supervisory manual with methodologies for risk-based supervision, improved training programs for inspectors, new AML/CFT rules, and additional information-sharing agreements with other regional supervisors to enhance monitoring of financial conglomerates. The mission emphasized the need to enhance the monitoring of household debt and mitigate risks associated with the large concentration of personal loans in the public pension fund portfolio. 

    Stress tests on the banking sector, conducted by staff, show that the sector is broadly resilient to most standardized shocks. The tests show the banking sector resistance in managing interest rate, foreign exchange, and liquidity shocks individually, with capital adequacy falling below the regulatory minimum only in the combined shock scenario. The mission indicated that an abrupt increase in NPLs could put capital adequacy ratios close to the statutory minimum and recommended close monitoring of developments in NPLs, which have been at historic lows. Increasing credit from commercial companies is a potential risk that needs to be assessed. 


    Related Link: Staff Report

    Keywords: Americas, Honduras, Banking, AML/CFT, Basel III, NPLs, Capital Adequacy, FSSR, IMF

    Featured Experts
    Related Articles
    News

    ESMA Updates Q&A on Credit Rating Agencies Regulation

    ESMA updated questions and answers (Q&A) document on the Credit Rating Agencies (CRA) Regulation.

    February 17, 2020 WebPage Regulatory News
    News

    EC Announces Funding for Sustainable Finance Project in France

    EC announced an investment for the latest projects, including a project on sustainable finance, under the LIFE program for the environment and climate action.

    February 17, 2020 WebPage Regulatory News
    News

    FDIC Releases Economic Scenarios for Stress Testing in 2020

    FDIC released the hypothetical economic scenarios for use in the upcoming stress tests for covered institutions with total consolidated assets of more than USD 250 billion.

    February 14, 2020 WebPage Regulatory News
    News

    EBA Acknowledges EC Adoption of Amended Supervisory Reporting Standard

    EBA acknowledged the adoption, by EC, of an Implementing Act with regard to the common reporting (COREP) and financial reporting (FINREP) changes, in accordance with the Capital Requirements Regulation or CRR.

    February 14, 2020 WebPage Regulatory News
    News

    APRA and ASIC Welcome Proposed Reforms for Superannuation Sector

    APRA and the Australian Securities and Investments Commission (ASIC) have jointly welcomed the proposed legislative reforms increasing the role of ASIC in the superannuation sector.

    February 14, 2020 WebPage Regulatory News
    News

    ESMA Responds to EC Consultation on Review of Benchmarks Regulation

    ESMA published its response to EC consultation on review of the Benchmarks Regulation in EU.

    February 14, 2020 WebPage Regulatory News
    News

    OSFI on Guide and Form for Replicating Portfolio Information Summary

    OSFI revised the instruction guide and form related to filing the Replicating Portfolio Information Summary.

    February 14, 2020 WebPage Regulatory News
    News

    ISDA Guide on Smart Contracts for Equity and Interest Rate Derivatives

    ISDA has published the fourth and fifth installments in a series of legal guidelines for smart derivatives contracts.

    February 13, 2020 WebPage Regulatory News
    News

    FED Paper Describes FLARE, A Top-Down Model for Stress Testing

    FED published a technical paper that describes the Forward-Looking Analysis of Risk Events (FLARE) model.

    February 13, 2020 WebPage Regulatory News
    News

    EC Rule Updates Data for Calculations Under Solvency II Reporting

    EC published the Implementing Regulation 2020/193, which lays down technical information for the calculation of technical provisions and basic own funds for reporting with reference dates from December 31, 2019 to March 30, 2020, in accordance with the Solvency II Directive (2009/138/EC).

    February 13, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4680