## Peru: Financial System Stability Assessment

_IMF Staff Country Reports, July 25, 2018_

## Source details

**Canonical URL:** [Peru: Financial System Stability Assessment](https://www.imf.org/en/publications/cr/issues/2018/07/25/peru-financial-system-stability-assessment-46119)

## Other formats

- [Markdown version](/en/publications/cr/issues/2018/07/25/peru-financial-system-stability-assessment-46119/index.md)
- [Structured JSON version](/en/publications/cr/issues/2018/07/25/peru-financial-system-stability-assessment-46119/index.json)
- [Bundle manifest](/en/publications/cr/issues/2018/07/25/peru-financial-system-stability-assessment-46119/bundle-manifest.json)

## Bibliographic details
- Published: July 25, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484370667.002

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### Key vulnerabilities and overview
- Peru’s financial system has developed and become more resilient since the previous FSAP in 2011, but some challenges remain.
- Main external vulnerabilities:
  - Reliance on commodity exports makes Peru vulnerable to growth in trading partners.
  - Exchange rate depreciation risk is amplified by significant dollarization.
  - These external vulnerabilities were confirmed by the Growth-at-Risk (GaR) analysis.
- Main domestic vulnerability:
  - Uncertainty and spillovers from the ongoing Lava Jato investigation.

### Banking sector structure and concentration
- The banking sector remains highly concentrated:
  - The four largest banks account for 83 percent of total private banking sector assets.
  - These top four banks are all classified as domestic-systemically important banks (D-SIBs) and hence are subject to elevated supervision.

### Stress-test findings and capital resilience
- The mission’s stress-test analysis showed the banking system is largely resilient to adverse shocks, largely because of banks’ initial strong capital buffers and profitability.
- Adverse scenario outcomes:
  - All large banks experience credit losses.
  - Initial high capital and profitability help the large banks remain above the minimum regulatory capital adequacy ratio (CAR) threshold of 10 percent.
  - For a few small banks, the CARs fall below the regulatory threshold.
  - The overall banking system’s profits decline substantially in the adverse scenario, with some banks facing losses.
  - The aggregate capital shortfall for banks that fall below the regulatory threshold is modest.

### Interconnectedness and systemic risk
- The interconnectedness/contagion analysis showed that the joint probability of distress across all banks has fallen since the post-global financial crisis peak level it reached in 2010.
- However, because credit exposures are strongly correlated among large banks and the system is concentrated, shocks that affect credit exposures have the potential to become systemic events.

*Peru: Financial System Stability Assessment — IMF Staff Country Report, July 25, 2018.*

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## Content in this bundle

- **Country Report**
  - [Country Report (Markdown version)](/-/media/files/publications/cr/2018/cr18238-perufssa.pdf.md){rel="alternate" type="text/markdown"}
  - [Country Report (PDF)](/-/media/files/publications/cr/2018/cr18238-perufssa.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2018/07/25/peru-financial-system-stability-assessment-46119_