November 11, 2019. Within the framework of the Regulatory Consistency Assessment Program (RCAP) of the Basel Committee III (BCBS), the BCRA was assessed as “compliant”—the highest possible grade—with NSFR and LE standards.
The BCBS works to ensure strong regulatory regimes and effective supervisory systems for all member countries.
In 2012, the Committee created the RCAP in order to monitor the adoption of Basel III regulations, assess compliance entirely and coherently, and identify significant deviations in the regulatory framework.
Through the RCAP the Basel Committee seeks to ensure a coherent implementation of the Basel III standards by all member countries, thus contributing towards international financial stability.
The assessment focused on regulations on NSFR (Net Stable Funding Ratio), and LE (Large Exposures)—known as “Large Exposures to Credit Risk” at the BCRA. The BCRA obtained the highest possible assessment grade: compliant. As regards LE, the Committee stated that while Basel requires that only internationally active banks are subject to this standard, Argentina's regulations are more stringent than the international standards (super-equivalent standard) for they are applicable to all banks.
The NSFR rules require banks to keep a stable financing profile in terms of their assets and off-balance sheet items. The purpose is to prevent a potential shock of a bank's usual financing from eroding its liquidity position, thus increasing its bankruptcy risk.
LE regulations are concerned with large exposures to credit risk (diversification) which may have a bearing on the institution.
The BCRA work team was made up of members from the following Deputy General Management Offices: Financial Regulations; Reporting System and Financial Consumer Protection (SEFyC); and Supervision and Monitoring (SEFyC), among others.
The regulations are applicable to the whole Argentine financial system with the aim of making it sound and in keeping with the standards of international financial regulation and supervision.