Reuters logo
3 years ago
Fitch: Bank Resolution Not a Priority in Latin America
March 27, 2014 / 5:41 PM / 3 years ago

Fitch: Bank Resolution Not a Priority in Latin America

5 Min Read

(The following statement was released by the rating agency) NEW YORK, March 27 (Fitch) According to a special report published by Fitch Ratings titled 'Sovereign Support for Banks, Rating Path Expectations', the evolving dynamics of sovereign support for senior creditors of banks are not likely to affect Long-term Issuer Default Ratings (IDRs) or senior debt ratings of Fitch-rated Latin American banks where such ratings are driven by Support Rating Floors (SRFs) over the next two years. In Latin America, Fitch has assigned SRFs to state-owned Dominican and Panamanian banks, as well as domestic systemically important financial institutions (D-SIFIs) in Brazil, Chile, Colombia, Costa Rica, Guatemala, Jamaica, Mexico and Peru. As Fitch believes that in general, the authorities have both the willingness and capacity to provide support should it be required, and that they are not inclined to weaken their attitude toward bank support in the near term, there will be no immediate impact on ratings. In the case of other Latin American banks without a SRF or a SRF of No Floor (NF), sovereign support is not applicable to these banks' potential rating paths. This would include all banks in Argentina, Ecuador, El Salvador and Venezuela, as well as D-SIFIs in the Dominican Republic and Panama, among other Latin American countries. Although Brazil and Mexico are among the G-20 countries involved in the Financial Stability Board's effective resolution agenda, bank resolution is less of a priority relative to the EU and U.S. Support assumptions are most likely to weaken over time in these countries; however, Fitch does not expect any material changes over the typical ratings horizon of up to two years. Currently, there is no agenda to weaken sovereign support of senior creditors in either country. In other Latin American countries, discussion has been even more limited with respect to bank resolution or potential restrictions of sovereign support to bail out nonviable banks. Contact: Franklin Santarelli Managing Director +1-212-908-0739 Fitch Ratings, Inc. One State Street Plaza New York, NY 10004 Theresa Paiz Fredel Senior Director +1-212-908-0534 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: Additional information is available at ''. Applicable Criteria and Related Research: --Global Institutions Financial Rating Criteria (Jan. 31, 2014) --Sovereign Support for Banks (Dec. 2013) --The Evolving Dynamics of Support for Banks (Sept. 2013) --Bank Support: Likely Rating Paths (Sept. 2013) Applicable Criteria and Related Research: Bank Support: Likely Rating Paths here The Evolving Dynamics of Support for Banks here Sovereign Support For Banks: Update on Position Outlined in 3Q13 here Sovereign Support For Banks: Rating Path Expectations here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below