BC assesses that, according to the Comef minutes, caution and diligence is required in granting credit

BC assesses that, according to the Comef minutes, caution and diligence is required in granting credit

In the last three months, financial institutions have maintained their risk appetite, according to the Central Bank, which however assessed that caution and diligence is needed in granting credit.

The minutes of the November meeting of the Financial Stability Committee (COMEF), released this Wednesday, highlighted that the pace of credit growth has accelerated in the portfolio of micro, small and medium-sized enterprises (MSMEs) which have already materialized risks and debts high.

For families, the BC highlighted that, in addition to the acceleration of credit in the highest risk modalities, there is a slight deterioration in the quality of benefits in some lower risk modalities, in a context of compromised income and high debt.

“According to the Committee, this scenario, added to the increase in interest rates, requires further caution and diligence in granting credit, both in terms of quality of loans and risk appetite,” the document reads.

Comef also assessed that asset prices and credit growth are not a concern in the medium term, although there are uncertainties to monitor.

According to the minutes, bank credit maintained its growth rate, in line with economic activity and the maintenance of risk appetite.

“The importance of credit obtained through capital markets is notable and continues to grow,” he said.

The BC also indicated that the prospective global scenario presents risks that could lead to the materialization of repricing scenarios for global financial assets.

Uncertainties regarding the pace of activity, the prolongation of the period of high interest rates and equilibrium levels of long-term interest rates, fiscal sustainability and the appropriateness of announced policies were cited as factors for this in major economies.

“There are also concerns about the divergence between fundamentals and the valuation of risky assets or real estate and the risks of further exogenous shocks,” the minutes read.

“Furthermore, the stress events that have occurred in the financial sector since 2023 have demonstrated that there are accumulated vulnerabilities in both banks and non-bank financial intermediaries that may materialize material financial risks. Overall, emerging economies have shown resilience in the face of adverse external conditions. scenario”, he added.

Source: Terra

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