Banks latest publications
Asset quality deteriorated as a slowing economy continues to weigh on lenders. Banks' profits are suffering pressure on narrowing net interest margin, lower pricing capability, and rising provisions. Although the interconnectedness between banking and the shadow banking system has increased, the room for upside is limited.
Credit to the private sector slowed down due to lower demand. The business and consumer portfolios contracted, while the housing portfolio reduced its dynamism. Financing to the public sector accelerated significantly.
The crisis caused by COVID-19 is showing its first impacts on the banking sector. Our analysis assesses the impact on the sector of seven factors and its trends: monetary policy, digitalization, regulation, economic growth, new entrants, competitive landscape and government support.
November 18, 2020
US | Nonbank financial intermediation, financial sector stability, and policy implications
Nonbank financial intermediation represents a large share of the U.S. financial sector. In times of crisis, it has been supported by the primary banking regulator - the Federal Reserve. In the absence of changes in oversight, this could lead to increased moral hazard and financial instability over the long run.
In August the credit and deposits of the banking system exhibited more clearly the consequences of the economic recession. However, the stress test carried out by the Stability of the Financial System Board, underlined that the banking sector has liquidity and solvency conditions to withstand adverse economic scenarios.
The Covid crisis has shown that the reform of international financial regulation in recent years has not corrected the procyclicality problem. On the contrary, this problem has worsened as a result of the new accounting standards. The article explores the reasons for this and possible policy measures to address the problem.
Colombia is already in the process of recovery. Low interest rates and government policies will help reactivate private demand. The fiscal effort should focus on the activities with the most impulse over the others.
October 19, 2020
Mexico | Credit to the non-financial private sector registered a contraction in real terms
In August 2020, the balance of current credit granted by commercial banks to the private sector grew at a nominal annual rate of 2.7% (-1.3% real), lower than the nominal rate observed the previous month (4.9%) and the nominal rate of 8.9% observed in the same month of 2019.