Through the Regulatory Conformity Assessment Program (RCAP), the Basel III Committee awarded the BCRA the best possible score (compliant) in the revision of two risk-related standards: NSFR and LEX.
The Basel Committee’s job is to ensure the strength of regulatory regimes and the effectiveness of supervisory systems in all its member countries.
The Committee created, in 2012, the Regulatory Conformity Assessment Program (RCAP), to monitor the timely adoption of Basel III standards and assess the adoption in a comprehensive and coherent manner and understand if there are significant deviations in the regulatory framework.
Through the RCAP, the Committee seeks to ensure the consistent application of the Basel III framework in the various countries that make up the RCAP, thus contributing to international financial stability.
The rules on NSFR (Net Stable Funding Ratio), which in the BCRA is the Net Stable Funding Ratio standard, and LEX (Large Exposures), which is locally called Large Exposures to Credit Risk, were supervised. The Bank obtained the highest possible grade: compliant. With respect to LEX, it was pointed out that because it applies to all banks (Basel only requires internationally active banks), our standard is stricter than the international standard (superequivalent).
The NSFR (Net Stable Funding Ratio) requires banks to maintain a stable funding profile in relation to their off-balance sheet assets and activities. The aim is to reduce the likelihood that disruption to a bank’s usual sources of funding will erode its liquidity position, thereby increasing its risk of failure.
In the case of Lex, it deals with regulations on large exposures to credit risk (fractionation) that, due to their high amounts, could represent a risk for the entity.
The Central Bank’s working group was composed of members of the general sub-managers of Financial Regulation, Information Regime and Protection of Users of Financial Services (SEFyC) and Supervision and Monitoring (SEFyC), among others.
These regulations are applied in the Argentine financial system with the aim of maintaining it in a strong and solid way, accompanying international standards of international financial supervision and regulation.
