IMF Staff Country Reports

El Salvador : Financial System Stability Assessment

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

February 11, 2014

Electronic Access:

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Summary:

This paper discusses key findings of the detailed assessment of compliance of the Basel Core Principles for Effective Banking Supervision for El Salvador. The Salvadoran financial system is comparable with its regional peers in terms of size. 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 amount to 3.8 percent of total loans, up from about 2 percent before the crisis. The Salvadoran authorities are also in the process of overhauling the supervisory landscape.

Series:

Country Report No. 14/44

Subject:

Article IV consultation reports Bank legislation Bank soundness Bank supervision Banks Basel Core Principles Capital markets Economic indicators El Salvador Financial safety nets Financial sector Financial system stability assessment Nonbank financial sector Reports on the Observance of Standards and Codes