Argentina

This paper provides technical analysis and detailed information underpinning the Financial Sector Assessment Program in Argentina. The implementation of stress tests is conceptually challenging in the Argentinean context, and the results must be interpreted with a high degree of caution. The stress tests examined the resilience of the Argentine banking system to solvency, liquidity, and contagion risks. These tests suggest that most banks are in a position to withstand substantial levels of stress while still phasing in capital requirements under Basel II, and credit risk is the most important vulnerability. Banks appeared resilient to market risk but less so to sovereign risks.