According to a report that Quantum financeprivate banks incorporated 127% more public debt into their assets between November 2019 and the same month in 2022.
This increase it was reflected in banks’ assets, rising from $1.8 trillion to about $4.2 trillion. Being these weights in treasury billsBanks are lenders to the public sector.
In the second half of 2022, exposure increased to the public sector according to the report of the consulting firm headed by former finance secretary Daniel Marx. Labor added that the decline in private lending was mainly a result of supply and demand. “Banks weren’t offering good credit packages to individuals, and individuals weren’t asking for financing.”
This generated situation the assets of the banks will come to consist mainly of Treasury bills and to a lesser extent private lending, this habit change represented a 15% drop in loan supply and demand
In the Quantum report it can be seen that private sector deposits in pesos increased by 44% between November 2019 and November 2022 (61% of total liabilities in that month), “and its composition changed, with effects on the cost of funding for banks. Time deposits increased by 55%, a relative increase greater than that of savings and current accounts”.
Private sector dollar deposits down 41% during the same period. Thus, in recent years the financial system has increased its ability to lend pesos relative to its ability to lend dollars.
With the aim of limit funding from the central bank to the national treasurysome monetary policies have been changed, such as the renewal of national public debt maturities. This made the banks decide to increase their holdings of Treasury bills.
In this way, private banking has become a lender of the public sector: the Central Bank, the National Treasury and the Provinces.
Fernando J. Genazzini
Source: Clarin
