Modernizing Bank Regulation in Support of Financial Deepening: The Case of Uruguay

Author/Editor: Adler, Gustavo ; Mansilla, Mario ; Wezel, Torsten
Publication Date: September 01, 2009
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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 studies how Uruguay's regulatory framework was gradually strengthened to address shortcomings identified during the 2002-03 crisis, to align with international standards and, more recently, to deal with cyclical pressures resulting in an acceleration of bank lending. In particular, regulatory reforms pertaining to loan classification and provisioning as well as liquidity requirements are reviewed and evaluated against best practices. The paper concludes that prudential regulation in Uruguay now generally conforms to high standards while also embracing innovative elements such as dynamic provisioning.
Series: Working Paper No. 09/199
Subject(s): Bank reforms | Bank regulations | Bank supervision | Banking sector | Basel Core Principles | Business cycles | Credit expansion | Credit risk | Financial crisis | Financial soundness indicators | Liquidity management | Loans | Risk management | Uruguay

Author's Keyword(s): Credit growth | credit risk | loan classification | loan provisioning | bank liquidity | regulatory reform
Publication Date: September 01, 2009
Format: Paper
Stock No: WPIEA2009199 Pages: 28
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