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

_IMF Staff Country Reports, November 30, 2018_

## Source details

**Canonical URL:** [Brazil: Financial Sector Assessment Program-Technical Note on Stress Testing and Systemic Risk Analysis](https://www.imf.org/en/publications/cr/issues/2018/11/30/brazil-financial-sector-assessment-program-technical-note-on-stress-testing-and-systemic-46416)

## Other formats

- [Markdown version](/en/publications/cr/issues/2018/11/30/brazil-financial-sector-assessment-program-technical-note-on-stress-testing-and-systemic-46416/index.md)
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## Bibliographic details
- Published: November 30, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484387566.002

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### Key findings
- 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 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.

### Risks and outlook
- The outlook for the nonbank sector will become more challenging in the environment of lower interest rates.
- Lower returns will affect investment income.
- A search for yield may increase risk-taking in the nonbank sector.

### Subject coverage and keywords
- Subjects: Banking, Credit, Financial institutions, Financial sector policy and analysis, Money, Mutual funds, National accounts, Personal income, Solvency stress testing, Stress testing
- Keywords: accounts receivable, asset sale, capital ratio, central bank, CR, Credit, foreign currency, Global, government bond, hurdle rate, investment funds, ISCR, Mutual funds, No. 18/344, parent company, Personal income, publication service, return on equity, sensitivity analysis, Solvency stress testing, Stress testing, unrealized loss

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- **Country Report**
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_Source: https://www.imf.org/en/publications/cr/issues/2018/11/30/brazil-financial-sector-assessment-program-technical-note-on-stress-testing-and-systemic-46416_