El Salvador
Detailed Assessment of Compliance of the Basel Core Principles for Effective Banking Supervision

This paper presents an assessment of compliance with the Basel Core Principles for Effective Banking Supervision in El Salvador. The regulatory authority Superintendencia del Sistema Financiero (SSF) has taken a number of initiatives to strengthen and upgrade supervision. This includes, among others, a risk unit with specialized expertise and continued efforts to foster cross-border cooperation and coordination. Despite considerable efforts, for the SSF is commended for its efforts, the lack of regulation in practically all risk categories is a major impediment to further progress. The lack of standards in those areas, combined with severe shortcomings in legal protection and deficiencies in the remedial action framework for addressing minor transgressions, limits the SSF’s ability to address imprudent behavior by banks.

Abstract

This paper presents an assessment of compliance with the Basel Core Principles for Effective Banking Supervision in El Salvador. The regulatory authority Superintendencia del Sistema Financiero (SSF) has taken a number of initiatives to strengthen and upgrade supervision. This includes, among others, a risk unit with specialized expertise and continued efforts to foster cross-border cooperation and coordination. Despite considerable efforts, for the SSF is commended for its efforts, the lack of regulation in practically all risk categories is a major impediment to further progress. The lack of standards in those areas, combined with severe shortcomings in legal protection and deficiencies in the remedial action framework for addressing minor transgressions, limits the SSF’s ability to address imprudent behavior by banks.

I. Summary, Key Findings, and Recommendations

Introduction

1. This assessment of the Basel Core Principles (BCP) was conducted as part of the FSAP Update evaluation of the El Salvador financial system from April 22–May 10, 2010. As agreed, the supervisory framework was assessed against the BCP methodology issued in October 2006. The assessment was conducted by Mr. Miquel Dijkman, World Bank, and Ms. Socorro Heysen, a consultant with the IMF.

Information and methodology used for assessment

2. The Salvadoran authorities generously provided the assessment team with key documentation, including a self-assessment of compliance with the 25 Basel Core Principles, the legal and regulatory framework for banking supervision, off-site monitoring reports and various other reporting schedules submitted by the banks. During their stay, the assessors held extensive discussions with the supervisory staff of the Superintendencia del Sistema Financiero (SSF). The assessors also met with representatives from the Banco Central de Reserva (BCR), a number of external auditors and private bankers. As part of the assessment of home host relationships, the assessors had telephone interviews with two home supervisors of major Salvadoran banks. The assessors enjoyed excellent cooperation with their counterparts and received all the information requested, including a self assessment, relevant regulations, laws, and various supervisory reports. The team extends its thanks to the staff of the various institutions and in particular to the staff of the SSF for their participation in the process and their hospitality.

3. The assessment of compliance with each principle is made on a qualitative basis. A four-part assessment system is used: compliant; largely compliant; materially noncompliant; and noncompliant. To achieve a ‘compliant’ assessment with a principle, all essential criteria generally must be met without any significant deficiencies. A ‘largely compliant’ assessment is given if only minor shortcomings are observed, and these are not seen as sufficient to raise serious doubts about the authority’s ability to achieve the objective of that principle. A ‘materially noncompliant’ assessment is given when the shortcomings are sufficient to raise doubts about the authority’s ability to achieve compliance, but substantive progress has been made. A ‘noncompliant’ assessment is given when no substantive progress toward compliance has been achieved.

4. The ratings assigned during this assessment are not comparable to the ones assigned in the 2000 FSAP, as the bar to measure the effectiveness of a supervisory framework has been raised in the new methodology. New criteria have also been added while existing ones have been redefined.

Institutional and Macroeconomic Setting and Market Structure—Overview

5. The Salvadoran financial sector is dominated by the banking industry. There are currently nine private banks, two state banks, two foreign branches, two savings and loan associations, and six cooperative banks operating in El Salvador. The SSF is responsible for the licensing, regulation and supervision of the above-mentioned banks, hereinafter called ‘scheduled banks.’

6. Bank ownership has changed substantially in the last few years. All private domestic banks have been bought by international or regional banks (e.g., Citibank Cuscatlán, HSBC Banistmo, Scotia, Bancolombia Agrícola, and BAC). As before, financial groups (i.e., those including a combination of banks, insurance and securities companies), remain an important feature of the financial system, but now have a an increasingly international dimension: at end-2005, the four largest groups (HSBC, Citibank, UNO and Bancolombia) represented 31 percent of the financial company assets in the region; and, in El Salvador, HSBC, Citibank (which acquired the UNO and Cuscatlán group), and Bancolombia accounted for close to 63 percent of the banking assets at end-2009.

7. The Salvadoran financial system is comparable with its regional peers in terms of size. Although (foreign-owned) banks still constitute the backbone of the financial sector, the banking sector’s share has been falling. As of end-2009, banks’ assets amounted to over US$13 billion, equivalent to about 64 percent of total financial assets, compared to US$11 billion or 74 percent in 2004. By contrast, the market share of private pension funds expanded rapidly from US$2.2 billion to US$5.2 billion (14.7 percent to 25.2 percent of financial assets). Consumption and mortgage credit have increased at the expense of corporate loans. Following a similar pattern as in Guatemala and in Honduras, credit to firms has dropped continuously.

8. The financial system has weathered the global financial crisis reasonably well. Reflecting a flight out of riskier assets and a number of recapitalization rounds, capital adequacy levels slightly increased and currently averages nearly 17 percent. Nonperforming loans (NPL) amount to 3.8 percent of total loans, up from about 2 percent before the crisis. Specific provisions currently cover some 110 percent of total NPLs, which are defined as loans more than 90 days overdue. At the backdrop of a severe deterioration of the real economy, provisioning increased significantly in 2009. This affected profitability, as the return on assets fell from 1.2 percent in 2007 to 0.4 percent in early 2010.

9. The SSF is responsible for the licensing, supervision and regulation of the banking sector and fulfills this through on-site inspections and off-site supervision. Since the last FSAP, the SSF has embarked upon an ambitious project to move towards risk-based supervision. The SSF was reorganized in 2008 and now features a Dirección de Riesgos with specialists in various risk categories, which allows the supervisory teams to tap on the specialized expertise that is available in the Dirección.

10. In response to the changing ownership structures in the Salvadoran banking sector, the SSF has also stepped up efforts to enhance cross-border cooperation, both bilaterally and regionally. The SSF has signed Memoranda of Understanding with all home supervisors. These agreements primarily cover exchange of information in the context of ongoing supervision. In addition, the Comité de Enlace of Central American supervisors (CECAS) has stepped up regional coordination. CECAS has quarterly meetings and monthly teleconferences where supervisors present relevant information, risks and concerns about the banks operating under their jurisdictions.

11. The Salvadoran authorities are also in the process of overhauling the supervisory landscape. A draft Law1 is currently discussed in the Asamblea, and agreement is expected in the course of this year. The law aims to separate powers of regulation, supervision and sanctioning. It does so by (i) transferring the right to issue regulation from the Superintendency of Banks (SSF) to the central bank (BCR) and (ii) merging the superintendencies of banks, securities firms, and pension funds, thus creating a sole supervisory authority.

12. Notwithstanding these positive developments, there are serious enforcement issues. The SSF’s effectiveness as a supervisory agency is affected by a lack of legal protection of supervisors. Litigation can and does occur in practice. The SSF ability to address imprudent behavior by banks is also compromised by gaps in the regulatory framework. Regulation is lacking in such areas as corporate governance, credit risk, liquidity risk, market risk, operational risk, interest rate in the banking book, information technology and investment valuation and derivatives. Although supervisory practices in these areas have improved, the lack of standards puts the SSF at a disadvantage in addressing imprudent behavior by banks. This is aggravated by the limitations of the current remedial action framework, which includes only limited powers for the SSF to take preventive action at an early stage, i.e. before inadequate practices or vulnerabilities lead to undercapitalization. The toolkit does for instance not include powers for the supervisor to limit the distribution of dividends, constrain existing or new operations and acquisitions, or enforce the sale of assets.

13. In pushing forward the transition towards risk-based supervision, the SSF faces human resource constraints. The SSF’s supervisory capacity already seems stretched, which is aggravated by the addition of new tasks to the supervisors’ responsibilities, in particular with regard to consumer protection. A further upgrading of supervisory capacity, both in quantitative and in qualitative terms, is therefore necessary.

Preconditions for Effective Bank Supervision

14. The Salvadoran economy is characterized by full dollarization and tight links to the United States. The fully dollarized exchange regime instituted in 2001 replaced a peg to the U.S. dollar that had persisted since 1994. Merchandise exports to the United States amount to 12 percent of GDP, over half of total shipments. Remittances receipts were the highest in Central America at over 17 percent of GDP from 2003–2007, and also come mainly from the United States.

15. Between the 2004 Update and the onset of the global financial crisis in late 2008, economic growth accelerated and macroeconomic fundamentals improved. Helped by buoyant external demand and ample accommodative financing conditions, real GDP grew by an average of 3.6 percent from 2005–2008, compared to 2.1 percent from 2001–2004. Inflation has averaged about 4 percent, anchored by dollarization.

16. The global financial crisis and political uncertainty hit economic activity hard in 2009. The deteriorating external environment, coupled with uncertainty over macroeconomic policies in the run-up to the 2009 elections sharply reduced trade flows and remittances and raised deposit and lending rates. Private capital flows became negative, as banks and companies paid down foreign liabilities. Domestic credit to the private sector also declined, reflecting both banks’ increased risk aversion and lower demand for credit. Private consumption and investment fell sharply, and real GDP declined by 3.5 percent in 2009, after growing by 2.4 percent in 2008.

17. The public infrastructure in El Salvador is reasonably developed. More than 4000 chartered accountant individuals and firms operate in El Salvador, including representatives of the five large international firms. The Accounting and Auditing Oversight Board (CVCA) is responsible for the oversight of the accounting profession in El Salvador. A transition to IFRS was initiated in 2004, but it is still in progress. All listed companies are required to publish their audited financial statements, according to the IFRS for the nonfinancial firms, and according to the accounting standards defined by their regulators in the case of the financial sector firms. Nonlisted companies are also subject to various reporting requirements including filing their year end balances with the Commercial Registry. Starting on 2011, all listed companies (with the exception of those in the financial sector) will be require to issue their financial statements using IFRS, while all unlisted companies will use IFRS for small and medium entities. However, the CVCA has limited resources and there is little oversight regarding the compliance with these requirements.

18. The SSF has set up a so-called Central de Riesgo, which collects credit information of Salvadoran nationals and legal persons provided by supervised institutions only. In addition to the Central, a number of private companies collect credit information for debt provided by unsupervised institution. There is also a functioning central registry that records liens on collateral pledged by debtors. Nonetheless, multiple mortgage loans to one single underlying asset do occur, provided that the total sum of mortgages does not exceed the value of the underlying. Although the primary mortgage provider has to approve the granting of additional mortgage loans, complications in collateral seizure may arise in case the debtor remains current on the primary mortgage but defaults on the other loans. Periodic valuations of real estate assets are mandatory and are conducted by certified specialists.

19. The Salvadoran banking sector has demonstrated considerable dynamism, as is evidenced by major changes in the ownership structure of the local banks and a new bank starting operations. Furthermore, Salvadoran banking is among the most efficient in the region, as is illustrated by the fact that Salvadorian banks present the lowest administrative costs in Central America, suggesting relative efficiency in banking service delivery.

20. The deposit insurance fund (IGD) was created in 1999 and currently covers deposits of up to $9,000 at 12 commercial banks and, as of 2010, at 6 cooperative banks and 2 savings and loans associations.2 It however lacks resources to undertake its mandate effectively. The IGD is funded by a loan from the BCR (currently $13 million) and premiums (equivalent to an annual rate of 0.10 percent of deposits) paid quarterly by member banks. IGD’s current reserve fund from BCR and bank contributions (US$96 million or 1.1 percent of total deposits) is enough to finance the resolution of each of the seven smallest banks and one saving and credit institution individually.

21. There are potentially serious weaknesses in the arrangements for systemic liquidity. The high liquidity ratios for the Salvadoran banks need to be seen against a background of a lacking interbank market, limiting the scope for banks with liquidity surpluses to lend to banks with liquidity shortages. Furthermore, the BCR is as of yet by law prohibited to lend to the banking sector and can therefore not function as a Lender of Last Resort. The BCR is however making preparations to enhance its ability to provide systemic liquidity.

Main Findings

22. Since the FSAP in 2004 the SSF has taken a number of initiatives to strengthen and upgrade supervision. This includes amongst others the creation of a risk unit with specialized expertise and continued efforts to foster cross border cooperation and coordination. While the efforts have been considerable, and the SSF is lauded for its efforts, the lack of regulation in practically all risk categories is a major impediment for further progress. The lack of standards in those areas, combined with severe shortcomings in legal protection and deficiencies in the remedial action framework for addressing minor transgressions limit the SSF’s ability to address imprudent behavior by banks. While supervisory practices have improved considerably, the transition to risk based supervision is as of yet incomplete. Procedures used by the supervisors are still primarily compliance based and appear to focus on verifying the existence of policies and risk management procedures rather than determining if they appropriate to the size and nature of the bank’s activities.

23. The following summarizes the main findings of the detailed assessment of compliance with the BCP.

Objectives, Independence, Powers, Transparency and Cooperation (CP1)

24. The SSF is responsible for the licensing, supervision and regulation of the banking sector and fulfills this through on-site inspections and off-site supervision. The SSF has valuable institutional assets to preserve, including its prestige among the general public, banks, auditors, the financial markets, the trust of the Salvadoran government and the dedication and capacity of its technical staff. It has also undertaken significant efforts to enhance cross-border cooperation, both bilaterally and regionally.

25. In exercising its supervisory tasks, the SSF however suffers from a lack of regulation in key risk areas. Regulation is lacking in such areas as corporate governance, credit risk, liquidity risk, market risk, operational risk, interest rate in the banking book, information technology and investment valuation and derivatives. Although supervisory practices in these areas have improved, the lack of standards puts the SSF at a disadvantage in addressing imprudent behavior by banks.

26. This is aggravated by a lack of legal protection for supervisory staff. Litigation can and does occur. Legal challenges not only distract supervisory resources from where they are needed most, it also impacts the willingness of the SSF to use its corrective powers. Another concern is that the remedial action framework includes only limited powers for the SSF to take preventive action before inadequate practices or vulnerabilities lead to undercapitalization. In particular, the toolkit does not include powers for the supervisor to limit the distribution of dividends, constrain existing or new operations and acquisitions, or enforce the sale of assets. Such measures are necessary to bring about improvements in management and penalize minor transgressions before undertaking more drastic measures, such as regularization.

27. Lastly, the SSF’s supervisory resources are stretched, complicating the transition towards risk-based supervision. This is made worse by new tasks added to the supervisors’ work load, particularly with regard to consumer protection. Priority should therefore be given to upgrading supervisory capacity, both in quantitative and in qualitative terms.

Licensing and Structure (CPs 2–5)

28. The term ‘bank’ is defined in the law, as are the permissible activities. Cooperative banks are authorized by the SSF to accept deposits and are automatically regulated and supervised by the SSF as established in the Law on Cooperative Banks. They are also covered by the deposit insurance fund. Cooperatives with assets exceeding US$68.57 million are also subject to mandatory supervision. In practice, a considerable number of cooperatives is factually engaged in attracting deposits (which are instead described as “member contributions”) and are below the US$68.57 million threshold. Effective supervision and oversight of this segment is lacking, nor are these cooperatives restrained by the definition of permissible activities for cooperative banks of Art. 34 of the Cooperative Banks and Savings and Loan Partnerships Law.

29. Before starting a bank in El Salvador, the SSF must authorize the public call to buy shares. Once the public promotion has been approved, the founders request the SSF’s authorization to set up a corporation. The main criteria for the SSF in deciding on the application are the outcomes of the fit and proper test of the shareholders representing more than 1 percent ownership and the assessment of the submitted financial projections and business plans of the new bank. The current bank law does however not explicitly allow the SSF to revoke the license if it is based on false information. By lack of corporate governance regulation there is also no clear norm for start-up banks to comply with in this area.

30. Regarding transfer of significant ownership, the SSF applies two thresholds of 1 and 10 percent of the shares of the bank. Prior authorization by the SSF is required to exceed these thresholds, which is based on a fit and proper test of the incumbents. The SSF expressed that it did not always manage to identify the ultimate beneficial owners of banks. Reflecting a very high degree of foreign penetration in the financial system, it relies on home supervisors to identify ultimate beneficial owners of the banks with sizable operations in El Salvador. Shareholders who are in the 1–10 percent bracket and who are no longer considered fit should be prevented from exercising their shareholder rights, as is the case for shareholders owning more than 10 percent. In addition to the annual sworn declarations, shareholders should be required to proactively inform the SSF about any event affecting their suitability.

31. The SSF has the power to review all major acquisitions or investments, against prescribed criteria, including the establishment of cross-border operations. The invested amount may not exceed 50 percent of the equity fund or 10 percent of the loan portfolio, whichever is greater. There is scope for enhancing the legal criteria on the basis of which the SSF assesses acquisition or investment proposals. The SSF assesses the economic feasibility of the proposal, but a risk assessment is not a legal or regulatory requirement, even though it is in practice demanded by the SSF. Also, the criteria should include a check whether the proposed investment does not impede effective supervision.

Prudential Regulation and Requirements (CPs 6–18)

32. El Salvador’s required level of capital adequacy is 12 percent, higher than the required ratio applied in other Central American countries. The capital adequacy framework is however not fully in line with international standards. The statutory minimum requirement must be seen against a background of a liberal treatment of intangible assets (mostly goodwill), which are not subtracted from capital as required under Basel I. Risk weights currently provide little differentiation for the risk profile of asset base.

33. A tightening of the asset classification and provisioning rules has contributed to an improvement in the management of problem assets. Provisioning levels are now broadly in line with international practices, and the SSF monitors banks’ delinquent loan portfolio intensively. The SSF currently lacks the authority to oblige banks to raise provisioning levels over and above the levels that are required according to regulation. Although not required to meet the Core Principle, a number of additional suggestions for further strengthening can be made. Banks are currently required to downgrade corporate loans on the basis of past-due days, with an obligation to further downgrades if the repayment capacity of the debtor so warrants. This obligation only applies to corporate debtors, i.e. not to consumer or mortgage loans. Also, when debtors with multiple loans with various banks default on one loan, but stay current on others, the nonaffected loans are not automatically downgraded at all banks. Lastly, the practice of granting several mortgages on the basis of one underlying asset warrants monitoring.

34. There are important gaps in the existing regulatory framework. A considerable amount of regulation is under development, but is slow to be released. Regulation is lacking in such areas as corporate governance, credit risk, liquidity risk, market risk, operational risk, interest rate in the banking book, information technology and investment valuation and derivatives. Supervisory practices in these areas have improved, while the arrival of reputable foreign banks has raised risk management standards. Still, the lack of standards raises compliance issues as the SSF cannot coerce banks to comply with its requirements. There is therefore an urgent need for the SSF to issue standards on key risk categories. The need for doing so is most urgent for credit risk, liquidity risk and corporate governance. Considering that the legal framework is rather vague, a key issue that needs to be addressed in these regulations is to spell out the responsibilities of banks’ directors regarding the oversight of management and the internal controls system to ensure that these are adequate relative to the risks and complexity of their operations. It is vital that the upcoming overhaul of the supervisory process, which amongst others entails a transfer of the authority to issue regulation to the BCR, does not delay the issuance of regulation. In this context, the BCR needs to build on the draft regulations that are under development within the SSF.

Methods of Ongoing Supervision (CPs19–21)

35. The transition towards risk based supervision needs to be enhanced by further upgrading supervisory techniques and practices. The SSF currently uses CAMELS models in order to generate bank-specific risk profiles. After establishing banks’ risk profiles, the SSF makes an assessment of the effectiveness of risk mitigants to determine residual risk. There is however a need to bring in more qualitative judgment in this assessment. In addition to checking whether procedures and policies are in place, the SSF faces the challenge of assessing the quality of risk management. The adequacy of risk management needs to be evaluated, considering the bank’s characteristics, such as size, complexity and risk appetite.

36. In doing so, the SSF faces human capacity constraints, due to organizational issues and a lack of resources. Offsite responsibilities are currently split over two divisions (Risks and Analysis), and the role and responsibilities of offsite supervision are not well specified. In addition, individual supervisory staff is often given a number of different roles, which is most problematic in the Risk Division. The unit leaders of this Division are not only responsible for a specific risk for all banks but are also the designated “relationship managers” for a financial conglomerate. The Supervisory Department is resource-constrained, as the increased consumer protection responsibilities entrusted to the SSF have been assigned to this department, diverting supervisory resources away from prudential supervision.

37. A further upgrade of supervisory practices therefore requires capacity building and reorganization of duties. The SSF’s supervisory capacity already seems stretched. The mission therefore recommends that the SSF give priority to further upgrading supervisory capacity, both in quantitative and in qualitative terms.

Accounting and Disclosure (CP 22)

38. The SSF receives a fairly comprehensive set of information on banks and banking groups, with the exception on relevant data on market and interest rate risks. The accounting manual, which is the basis for the reports submitted to the SSF and the audited financials published by banks, is prudent but outdated and does not conform to international standards. The norm differs from international accounting standards in the calculation of loan loss provisions, valuation of investments, deferred taxes and the extent to which risks and other material issues are revealed.

Corrective and Remedial Powers of Supervisors (CP 23)

39. The remedial action framework includes only limited powers for the SSF to take preventive action at an early stage, before inadequate practices or vulnerabilities lead to undercapitalization. In particular, the toolkit does not include powers for the supervisor to limit the distribution of dividends, constrain existing or new operations and acquisitions, or enforce the sale of assets. Such measures are necessary to bring about improvements in management and penalize minor transgressions before needing to take more drastic measures, such as regularization.

40. This is aggravated by a lack of legal protection for supervisory staff, as litigation can and does occur. Such legal challenges not only distract supervisory resources from where they are needed most, it also impacts the willingness of the SSF to use its corrective powers. The SSF has not issued regulation on sanctions to clearly define the severity of the violations and the corresponding scale of sanctions and make the sanctioning process more transparent for supervised entities and individuals.

Consolidated and Cross-Border Banking (CPs 24–25)

41. The SSF has stepped up its efforts to enhance cross-border cooperation, both bilaterally and regionally. In response to the changing ownership structures in the Salvadoran banking sector, it has signed Memoranda of Understanding with all home supervisors. These agreements primarily cover exchange of information in the context of ongoing supervision. In addition, the Comité de Enlace of Central American supervisors (CECAS) has stepped up regional coordination. CECAS has quarterly meetings and monthly teleconferences where supervisors present relevant information, risks and concerns about the banks operating under their jurisdictions. Some progress has also been made in the coordination with local supervisors of entities belonging to the conglomerates, to gather information and conduct simultaneous onsite exams, but additional efforts are needed to have a comprehensive framework to assess the risks that nonbanking local activities conducted by a bank or banking group may pose to the bank or banking group.

42. Table 1, to be included in detailed assessments, offers a summary of the main findings, including a column for ratings.

Table 1.

Summary Compliance with the Basel Core Principles—Detailed Assessments

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Aggregate: Compliant (C) – 4, Largely Compliant (LC) – 18, Materially Non-Compliant (MNC) – 7, Noncompliant (NC) – 1, Not Applicable (N/A) – 0

Recommended Action Plan and Authorities’ Response

43. In the immediate term, the SSF can take advantage of the window of opportunity in the revision of the SSF Law to consider necessary amendments, not included in current drafts.

  • Legal protection for bank supervisors.

  • Wider supervisory powers before the regularization stage (i.e. restrict the distribution of dividends and acquisitions or activities).

  • Broaden the requirement that the Board reports on aspects that could affect the stability of the bank to include also other material aspects and events that could affect the bank, short of threatening insolvency or illiquidity.

44. In the short term, it is recommended that the SSF expedite its regulatory process to issue important drafts necessary to enable enforcement of the necessary supervisory actions.

45. Table 2 below contains the specific recommendations to bring the supervisory framework up to international standards.

Table 2.

Recommended Action Plan to Improve Compliance with the Basel Core Principles

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Table 3.

Detailed Assessment of Compliance with the Basel Core Principles

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Authorities’ response to the assessment

46. The authorities agreed with the assessment.

1

The Ley de Supervisión y Regulación del Sistema Financiero.

2

The IGD does not insure BFA deposits as the BFA is government owned. This exception, established by law, affects the playing field with the rest of financial entities.

3

As an illustration, conflicts of interest could occur in the event of massive mis-selling of financial products. Consumer protection considerations would call for compensation to disadvantaged clients, which may conflict with prudential concerns.

4

The ratio of foreign loans to capital may not exceed 150percent.

5

The SSF has prepared a first draft.

6

Above 75 percent supervisory approval is required.

El Salvador: Detailed Assessment of Compliance of the Basel Core Principles for Effective Banking Supervision
Author: International Monetary Fund. Monetary and Capital Markets Department