The Peruvian Government's financial strength underpins the country's high capacity to
—despite the still considerably high level of financial dollarization, Moody's Investors Service has affirmed.
In this sense, the Government's willingness to support Peru's largest banks remains high given their systemic importance.
"Peru does not currently have plans to implement an operational regime to
resolve banks via creditor bail-in, the purpose of which is to avoid having to rely on taxpayer resources to rescue failing banks. Past actions of Peruvian authorities demonstrate their high willingness to support the stability of the financial system," it expressed.
"As a result of our government support assessment, all our rated
banks in Peru benefit from at least one notch of ratings uplift. Government-owned
COFIDE's issuer rating includes five notches of uplift, while
Banco de la Nacion's deposit rating incorporates one notch," Moody's said.
Banks
The system average liquidity coverage ratio (LCR) in early 2019 was 129% in soles and 159% in dollars, well above the 100% minimum required. Starting this year,
banks are also required to maintain a minimum net stable funding ratio (NSFR).
As of March 2019, liquid assets reached 27.06% of tangible banking assets, down from 30.2% in year-end 2017. Liquid assets are conservatively invested in highly liquid instruments. A large portion are deposits held at highly rated foreign
banks, and the remainder is made up of cash, central bank deposits, and A3-rated Peruvian government securities.
Editor's note: Based on information provided by Moody's.
(END) NDP/DTK/MVB