Moody’s Investor Services, the credit rating agency, said last Thursday in a report that financial institutions in Latin America have exposure “limited direct” to the fall of Silicon Valley Bank and the closures of Silvergate Bank and Signature Bank.
According to the firm, qualifying Latin American banks maintain adequate management over key risk considerations that culminated in the deterioration of investor confidence in US banks. However, they mentioned that despite this, the rapid changes that have been seen in financial confidence require close and continuous monitoring of the banking portfolio in Latin America.
In this sense, Moody’s reported in its report that only for the Brazilian bank Bradesco and Chile’s Banco de Credito e Inversiones (BCI), which have subsidiaries in the US, “risk is relatively contained given the small trades approach”.
On the other hand, according to the DF SUD portal, the agency indicated in its report that Latin American financial institutions are also less exposed to possible losses due to market value adjustments (MTM), “if they need to sell the portfolio because a part of it is hedged against movements in interest rates and the monetary authorities in these countries began tightening cycles long before the US or the EU”.
That said, in Moody’s judgment, most of the banking systems in the region are concentrated in large banks, “diversified” and “solid” who have long been disciplined about asset-liability mismatches.
Finally, it should be noted that Moody’s also mentioned that “limited direct exposure” is extended to both financial technology companies and crypto assets through deposits and loans.
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