The national financial system maintains positive indicators of stability, including adequate levels of capitalization, provisions and liquidity, according to the Central Bank, considering that the global economic scenario has deteriorated in recent months.
Global growth prospects have worsened with high inflation and monetary policy tightening by most central banks, which deteriorate global financial conditions, lead to asset repricing and raise funding costs, the central bank said in the minutes of the Committee’s meeting. Financial Stability (Comef), released this Thursday (8).
“The eventual materialization of extreme scenarios of global financial asset repricing due to monetary tightening, recession risks, and geopolitical risks could lead to a significant impact on emerging economies”, said the monetary authority.
On Monday, BC President Roberto Campos Neto expressed concern about a possible scenario in which the world enters an economic slowdown and global inflation is slow to subside. According to him, this environment would provoke a re-pricing of assets.
In the document, the BC considered that this risk has been mitigated by the normalization of monetary policy abroad and transparency in the conduct of interest rates by advanced economies.
He also added that Brazilian institutions have low exposure to foreign exchange risk and little dependence on external funding.
“The Committee is attentive to the evolution of the international scenario and remains prepared to act, minimizing any disproportionate contamination on the prices of local assets”, he said.
Another point of attention, for the BC, is an increase observed in the risk appetite of financial institutions, with high growth of non-consigned credit operations and credit cards – but still within historical standards.
For the committee, asset prices and credit growth do not represent a concern in the medium term, although there are uncertainties to be monitored.
The BC added that the banks’ provisions remained adequate, above the estimates of expected losses, and the capitalization and liquidity levels of the financial system are above prudential requirements.
“The results of the stress tests demonstrate that the system is resilient,” he said.
Comef is responsible for establishing guidelines for the preservation of financial stability and the prevention of systemic risks.
At its most recent meeting, held last week, the committee decided to keep the Additional Countercyclical Core Capital (ACCP) at 0%.
The additional is a portion of the institutions’ capital to be accumulated in moments of expansion of the credit cycle, dealing with credit risks and asset prices.
Source: CNN Brasil
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