Modernizing Bank Regulation in Support of Financial Deepening: The Case of Uruguay

29 Pages Posted: 13 Oct 2009

See all articles by Gustavo Adler

Gustavo Adler

International Monetary Fund (IMF) - Research Department

Mario Mansilla

International Monetary Fund (IMF)

Torsten Wezel

Deutsche Bundesbank

Date Written: September 2009

Abstract

This paper studies how Uruguay's regulatory framework was gradually strengthened to address shortcomings identified during the 2002-03 crisis, to align with international standards and, more recently, to deal with cyclical pressures resulting in an acceleration of bank lending. In particular, regulatory reforms pertaining to loan classification and provisioning as well as liquidity requirements are reviewed and evaluated against best practices. The paper concludes that prudential regulation in Uruguay now generally conforms to high standards while also embracing innovative elements such as dynamic provisioning.

Keywords: Bank reforms, Bank regulations, Bank supervision, Banking sector, Basel Core Principles, Business cycles, Credit expansion, Credit risk, Financial crisis, Financial soundness indicators, Liquidity management, Loans, Risk management, Uruguay

Suggested Citation

Adler, Gustavo and Mansilla, Mario and Wezel, Torsten, Modernizing Bank Regulation in Support of Financial Deepening: The Case of Uruguay (September 2009). IMF Working Papers, Vol. , pp. 1-28, 2009. Available at SSRN: https://ssrn.com/abstract=1486517

Gustavo Adler

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Mario Mansilla (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Torsten Wezel

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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