Assessing Banking Sector Soundness in a Long-Term Framework : The Case of Venezuela

Author/Editor: Rodolphe Blavy
Publication Date: October 18, 2006
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: 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.
Series: Working Paper No. 06/225
Frequency: Monthly
Subject(s): Banking sector | Bank soundness | Stress tests | Venezuela | Venezuela

Author's Keyword(s): Banking sector | financial soundness | macroprudential analysis | stress tests | Venezuela
Publication Date: October 18, 2006
ISBN/ISSN: 9781451864854/1018-5941 Format: Paper
Stock No: WPIEA2006225 Pages: 31
US$18.00 (Academic Rate:
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