Financial Crime World

Argentina’s Banking Industry Faces Challenges in Compliance with Regulatory Standards

Overview of the Argentine Banking System

The Argentine banking industry is comprised of 62 banks and 15 non-bank financial entities, according to the latest survey published by the Central Bank (BCRA). The top five financial institutions in terms of total assets in 2019 were:

  • Banco de la Nación Argentina
  • Banco Santander Rio SA
  • Banco de Galicia y Buenos Aires SAU
  • Banco de la Provincia de Buenos Aires
  • BBVA Banco Frances SA

Despite efforts to strengthen controls and reduce risk exposure, the banking industry still faces challenges in terms of confidence among the public. Banking inclusion levels in Argentina remain below average compared to other countries in the region.

Regulatory Regime Applicable to Banks

The Argentine banking industry is subject to strict regulations and controls provided by the Financial Institutions Law (FIL) since 1977. The BCRA is responsible for supervising and controlling the banking system and has vested its powers in the Superintendency of Financial and Foreign Exchange Institutions.

The FIL grants the BCRA a range of powers, including:

  • Granting and revoking bank licenses
  • Setting minimum capital requirements
  • Approving bank mergers and acquisitions

Regulations enacted by the BCRA are known as communications, which play a crucial role in designing and controlling the Argentine banking regulatory system. These communications interact with other specific regimes and have effects on the banking system.

Conclusion

The Argentine banking industry faces challenges in terms of compliance with regulatory standards, particularly in terms of financial inclusion. Regulatory authorities have prioritized financial inclusion and designed a national strategy to promote it, but more work is needed to strengthen controls and reduce risk exposure.

Key Takeaways:

  • The Argentine banking system consists of 62 banks and 15 non-bank financial entities.
  • Banking inclusion levels in Argentina remain below average compared to other countries in the region.
  • Regulatory authorities have prioritized financial inclusion and designed a national strategy to promote it.
  • Effective regulation and enforcement are essential to promoting a stable and secure financial system in Argentina.