Informe de Estabilidad Financiera

Summary

During the second half of 2025, the financial system deepened its role of intermediating resources with the private sector. The process was characterized by an increase in the relevance of credit to the private sector in the aggregate balance sheet—at a more moderate pace than in late 2024 and early 2025—accompanied by the reduction of exposure to the public sector and the readjustment of excess liquidity. From levels that were still limited, some exposures to risks inherent in financial intermediation continued to increase. In contrast, the financial system maintained a significant degree of its soundness, based mainly on the hedges constituted – liquidity, forecasts and capital – reaffirming the broad potential for future development.

At the local level, the economic program adopted since the end of 2023 continued to be implemented, with a focus on fiscal discipline, the reduction of inflation, and the correction of monetary and exchange rate imbalances. In the second half of the year, different policy measures were implemented to accompany the monetary reorganization that took place at the same time as the maturity of the LEFI, while the development of the interbank liquidity market was boosted. This occurred in a challenging context, given the increase in uncertainty as a result of the electoral process, which implied an increase in the search for foreign exchange coverage until October. In this context, the Government temporarily eliminated withholdings on grains and by-products and signed an exchange rate stabilization agreement with the U.S. Treasury Department. After the elections, favorable expectations were consolidated, which resulted in a marked recomposition in the prices of the different financial assets and progress in the normalization of the markets, with interest rates more in line with expected inflation. In this scenario, a new phase of the monetary program was announced at the end of the year, based on the remonetization of the economy, as part of the 2026 Goals and Plans. Additionally, in January the BCRA arranged a new repo with international banks for USD3,000 million, with the aim of strengthening the country’s international reserves.

Despite the volatile context at the local level registered until October, expectations of deterioration of the economy were contained, without significant impact on activity, which oscillated around a stable level throughout 2025 (mining, financial intermediation and agriculture sustained high growth rates). With regard to the financial markets, the Treasury continued to carry out debt auctions, with a preponderance of instruments in nominal pesos, although with shorter maturities and with changing yields (in the context of greater volatility in the secondary debt markets). However, at the end of November and beginning of December, yields in pesos in both the primary and secondary markets showed cuts compared to the middle of the year. A similar behavior was observed for bond yields in dollars in the secondary market; after the recovery of prices observed after the elections, the Treasury was able to place a bond in dollars with local legislation. With regard to the private sector, between July and December the real amount of financing through the local capital market grew (mainly explained by deferred payment checks and promissory notes), to which was added a strong dynamism in the placement of negotiable obligations with international legislation after the elections.

The international context tended to improve at the margin since the publication of the last IEF, as the uncertainty linked to trade disputes between large economies and different geopolitical conflicts subsided, although some caution is maintained due to the sustained existence of multiple risk factors. On the other hand, cuts in monetary policy interest rates continued to be recorded in several developed economies, with changing expectations regarding the expected path for the US. In this context, financial markets maintained a positive trend in recent months, both in terms of developed and emerging economies.

In the future, the main potential risks for all financial institutions are the possibility of a worsening of the external context, given that different factors (such as elements that imply a sudden change in growth expectations or investors’ risk appetite) may eventually be combined with the presence of various vulnerabilities (over-appreciated prices in certain markets, increase in debt levels, increase in the weighting of non-bank financial intermediation with procyclical behaviour). On the other hand, although once the local elections were over, the favorable prospects were consolidated, the context continues to be one of transition and efforts are being made to advance an ambitious agenda of structural reforms, along with the implementation of a new phase of the monetary program. In this sense, the possibility of weaker-than-expected economic growth or episodes of transitory volatility in local financial markets cannot be ruled out. However, given the strength of the local financial system, these situations of tension at the international or local level should be of an extreme nature to imply a challenge to financial stability.

The potential vulnerability of the financial system associated with equity exposure to credit risk remained the most relevant at the end of 2025 and for the near future. In the second half of the year, the exposure of all institutions to the private sector continued to grow, with an increase in credit risk materialisation ratios – still at moderate levels. Faced with this potential vulnerability, the financial system preserved a high level of forecasting and capital. The sensitivity exercises carried out (with extreme and unlikely assumptions of credit risk materialisation) reflect a high degree of resilience in the sector. In addition, aggregate private sector borrowing remained subdued.

The intermediation activity of all financial institutions continued to increase during the second half of 2025, reflecting lower growth rates compared to those observed in the last IEF. The slowdown in the pace of expansion was mostly reflected in the segment in national currency. The depth of bank financing to the private sector, from still very limited levels, continued to increase. It is estimated that the balance of credit to companies and households of all financial institutions represented 13.6% of GDP in October, increasing 2.5 p.p. compared to the last IEF (5.7 p.p. y.o.y.). Considering the accumulated in the year, the profitability indicators of the aggregate financial system were reduced compared to the previous IEF and in a year-on-year comparison. Quarterly profitability ratios were more volatile than in previous years. In this context, the levels of productive efficiency and scale of the banking sector continued to gradually improve, with ample potential for progress in these aspects of intermediation activity.

The growth in credit occurred in tandem with the resurgence of challenges to managing intrinsic risks in banking activity from the reduction of excess liquidity and the increase—from very limited levels—of the transformation of maturities and the mismatch of interest rates. In this regard, although the availability of bank funding continued to converge with respect to the balance of credit to the private sector since the last IEF, there were signs of a reduction in the indicators of exposure to systemic liquidity risk. Based on the evolution of deposits in pesos from the private sector, the sector’s main source of funding, a slight increase in maturity was observed during the period, with a less volatile and atomized bias. This was due to the lower weighting of funding obtained from legal entities providing financial services (mainly FCI), in addition to the significant growth in time deposits over demand accounts. The financial system maintains its coverage with liquid assets within a framework of readjustment of minimum cash regulations, while comfortably complying with the regulatory requirements derived from Basel III standards.

By 2026, the financial system is expected to continue to carry out its activity, maintaining room to increase its depth in the economy. In line with its objective of promoting financial stability, the BCRA will continue to develop macroprudential and microprudential monitoring, maintaining supervision and regulation in line with international best practices.