Global Finance - The Safest Banks In Latin America 2017

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eeuunikkeiexpat
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Global Finance - The Safest Banks In Latin America 2017

Post by eeuunikkeiexpat » Thu Oct 05, 2017 3:14 pm

Global Finance Names The Safest Banks In Latin America 2017
NEW YORK, September 6, 2017
Global Finance has named the Safest Banks in Latin America in an exclusive survey to be published in the November 2017 issue as part of the publication’s 26th annual ranking of the World’s Safest Banks.

https://d2tyltutevw8th.cloudfront.net/m ... 729390.pdf


Safest Banks in Latin America 2017

1 Banco del Estado de Chile
2 Banco Santander Chile
3 Banco de Chile
4 Banco de Credito e Inversiones




Safest Banks in Latin America 2016

1 Banco del Estado de Chile
2 Banco de Chile
3 Banco Santander Chile
4 Banco de Credito e Inversiones
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by admin » Thu Oct 05, 2017 3:54 pm

Yea, they could never have a proper run on the bank, because everyone would just end-up standing in line as normal, just to be told they need to go stand in another line, to get a signature to go stand in a different line. Meanwhile, the banks are flush with cash from over-charging you for not letting you withdraw your money.

Seriously though, the banks are pretty solid. Dig in to any of the quarterly reports, or regulatory filings, and you find they have very little risk on their books. In fact, if I had to critize most of them, they don't take sufficient risk relative to the capital they are sitting on. The economy could use a bit more liquidity sloshing around.
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by nwdiver » Thu Oct 05, 2017 11:05 pm

Santander and no Scotia........maybe it's not big enaugh in Chile


I see it made number 5 with ScotiaPeru......
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by passport » Thu Oct 05, 2017 11:33 pm

Ya, back in August Moody's wasn't as charitable rating 4 of the same banks: https://www.moodys.com/research/Moodys- ... -PR_371786

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Re: Global Finance - The Safest Banks In Latin America 2017

Post by admin » Fri Oct 06, 2017 8:47 am

yea, but that downgrade was a bachelet downgrade of the whole economy, because she has been maxing out the government credit cards. The banks were just next in line, even though very little has changed.

I guess the line the credit can get's kicked is:

Goverment downgrade

increased interest rates, in a slow economy

corporate downgrades

increased defaults due to higher interest rates and slower economy.

on and on.

Even though, as a practical matter, the interest rates in Chile are still at an historical low, and the economy by all indicators is set for a recovery of some sort next year.

Just knee jerk reaction of the credit rating agencies. Not even sure that little downgrade of Chile's sovereign rating, is statistically measurable anywhere.
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by admin » Fri Oct 06, 2017 8:54 am

in fact, the bluntly say that is why, better than I did:
RATINGS RATIONALE

The rating actions were prompted by the change in outlook to negative, from stable, on Chile's Aa3 sovereign bond rating, which reflects the government's capacity to provide financial support to the country's banks.

All the affected banks' long-term ratings currently benefit from at least three notches of uplift from their respective baseline credit assessments due to the very high probability that the government will support them if needed. Although the government's capacity to provide support may be deteriorating, as reflected by the negative outlook on its rating, Moody's expects its willingness to support the banks will remain very high. This assessment considers the Chilean authorities' track record of providing support to distressed financial institutions in the past; the very large deposit franchises of all of the affected banks, which are the country's four largest with deposit market shares ranging from 12.7% to 21.7% as of June; and the material systemic consequences of an unsupported failure of any of them. Nevertheless, if the government's rating is downgraded, the banks' ratings will be downgraded as well. Hence, the banks' ratings carry the same outlook as the sovereign.
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by admin » Fri Oct 06, 2017 8:57 am

I think it was BCI that just did a half billion dollar bond issue this week, that was over subscribed by something like 10 times.

Definitely not a lack of access to capital in the international markets.

BCI by the way, now owns an American bank, and is trying to acquire more american banks.
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by admin » Fri Oct 06, 2017 9:05 am

Then you have IPC coming in with a negative number for September.

http://www.pulso.cl/economia-dinero/ipc ... a-interes/

The central bank is probably going to cut interest rates again.
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by Britkid » Fri Oct 06, 2017 5:45 pm

Thanks for posting this. Don't know how accurate it is but probably better than any of us could guess.
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Re: Global Finance - The Safest Banks In Latin America 2017

Post by frozen-north » Fri Oct 06, 2017 7:19 pm

The article on Moody's website seems to assume that governments should bail out banks that run into financial difficulties. The last time I read about the topic was when this idea was discussed in the context of the financial problems of 2008, and there was still a discussion of what should have been the correct approach. Now it seems that the financial institutions, from Moody's perspective, have already said "Of course!".
The rating actions were prompted by the change in outlook to negative, from stable, on Chile's Aa3 sovereign bond rating, which reflects the government's capacity to provide financial support to the country's banks.

All the affected banks ... benefit from .... the very high probability that the government will support them if needed. .... Moody's expects its willingness to support the banks will remain very high. This assessment considers the Chilean authorities' track record of providing support to distressed financial institutions in the past; .....Hence, the banks' ratings carry the same outlook as the sovereign.
On the other hand:

IMF Survey : Big Banks Benefit From Government Subsidies

Banks deemed ‘too important to fail’ borrow at lower rates, take bigger risks
Policymakers should aim to remove this advantage to protect taxpayers, ensure level playing field, promote financial stability
Reforms helped reduce the implicit public subsidy to big banks

Reforms since the global financial crisis have reduced, but not eliminated the implicit government subsidy afforded to banks considered “too important to fail” because their failure would threaten the stability of the financial system.

In 2012, the implicit subsidy given to global systemically important banks represented up to $70 billion in the United States, and up to $300 billion in the euro area, depending on the estimates.

This implicit subsidy distorts competition among banks, can favor excessive risk-taking, and may ultimately entail large costs for taxpayers.


https://www.imf.org/en/News/Articles/20 ... pol033114a

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Re: Global Finance - The Safest Banks In Latin America 2017

Post by tiagoabner » Fri Oct 06, 2017 11:06 pm

Bailing out a bank is better than letting them go in bankruptcy, as that will have a more negative impact on the economy. Of course, that is only healthy as long as there are enough repercussion to the bank upper management so that it is not the go-to choice, but it makes sense economically. That's specially true when there is at least one large state-run bank involved.

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Re: Global Finance - The Safest Banks In Latin America 2017

Post by eeuunikkeiexpat » Fri Oct 06, 2017 11:11 pm

Better the banks balance sheets never lead to that hell so I disagree with admin that Chile banks should be taking more risks like their outside of Chile counterparts even with the same brand name.
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