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Assessing Banking Sector Soundness in a Long-Term Framework: The Case of Venezuela
Author:
Mr. Rodolphe Blavy null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 225
Language:
English
Publication Date:
18 Oct 2006
DOI:
https://doi.org/10.5089/9781451864854.001
ISBN:
9781451864854
ISSN:
1018-5941
Pages:
31
Keywords:
WP; central bank; bank regulation; a number of bank; bank behavior; bank legislation; banking sector indicator
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper combines financial soundness indicators (FSIs) and stress-testing methodologies to provide a broad assessment of the soundness of Venezuela's banking sector, based on a diagnosis of its structural and transient shortcomings. While the Venezuelan banking sector appears sound under current favorable economic conditions, it remains significantly vulnerable to cyclical downturns-which have been severe in the past. Banks are particularly exposed to interest rate and credit risks. This suggests that the strong FSIs may be partly the result of a conjunctural credit boom in the context of capital controls and very low real interest rates.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund