Brazil : Financial Sector Assessment Program-Technical Note on Stress Testing and Systemic Risk Analysis

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

November 30, 2018

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

The financial system has been resilient through the severe recession. Banks and investment funds dominate Brazil’s financial system landscape. The banking sector has continued to be well-capitalized, profitable, and liquid. Profitability has been supported by prudent lending standards, high interest margins and robust fee income, despite record loan losses. Outstanding nonperforming loans have increased marginally during the recession largely because banks have actively written off bad loans. The investment fund industry has also been solid, enjoying a steady growth of assets under management without experiencing net outflows, in aggregate, during the recession. Market-based indicators point to relatively low levels of systemic risk in 2017. However, the outlook for the nonbank sector will become more challenging in the environment of lower interest rates, as lower returns will affect investment income and a search for yield may increase risk-taking.

Series:

Country Report No. 18/344

English

Publication Date:

November 30, 2018

ISBN/ISSN:

9781484387566/1934-7685

Stock No:

1BRAEA2018008

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

143

Please address any questions about this title to publications@imf.org