International Monetary Fund. Monetary and Capital Markets Department
INTERNATIONAL MONETARY FUND
This Technical Note analyzes Safety Nets and Crisis Management Arrangements in El Salvador. In El Salvador, the banking safety net-emergency liquidity assistance, resolution and deposit insurance-faces particular challenges given it operates in the context of official dollarization. Although banks' liquid assets holdings are high, there are some weaknesses with the liquidity requirements in terms of dealing with banks' individual liquidity risks. The bank resolution scheme, which has not been tested, and the deposit insurance fund, which has insufficient funds, both need to be strengthened.