Executive summary
During the third quarter of 1997, the process of monetization of the economy continued. Monetary Resources amounted to $77,400 million in September, accumulating a growth of 28% in the last twelve months and 3.8% in the quarter. There was a significant increase in loans granted to the non-financial private sector, which grew by $2.9 billion in the quarter -5.2%- and were allocated in similar proportions to commercial and consumer operations.
The international reserves of the financial system amounted to US$ 28,400 million in September, with a growth of US$ 2,000 million compared to June. The ratio of Gold and Foreign Exchange Reserves/Financial Liabilities was 99% on average in the quarter.
In August, there was an increase of one percentage point in the minimum liquidity requirements, which contributed to reducing the prevailing excess liquidity and to record interest rates for loans between financial institutions somewhat higher than those of the previous quarter.
The financial statements of private banks for the May-July 1997 quarter show significant growth accompanied by high profitability and a significant drop in non-performing loan indicators. During the period, private banks increased their holdings of liquid assets -6%-, total loans grew by more than 7%, and net worth grew almost 8% as a result of the significant accumulation of
unallocated results.
The cumulative profitability up to July 1997 shows levels much higher than those of previous years, with a reduction in intermediation margins and a significant drop in administrative expenses. Continuing the trend shown throughout 1996, irregularity rates fell sharply. In particular, indicators measuring the degree of banks’ exposure to default reached levels lower than at the end of 1994. The excess integration of capital due to counterparty risk remained at values similar to those of the previous quarter.
