Regulatory Alerts2023-12-14 | NCF-02Technical Standards for the Establishment of Country Risk Reserves
The Central Bank of El Salvador issued Technical Standards NBCR-11/2023 requiring financial entities to establish accounting reserves for country risk associated with foreign asset placements. The regulation defines country risk, mandates the use of international credit ratings or internal models to classify countries into six risk categories, and specifies minimum reserve percentages ranging from 0% to 100%. It further establishes reporting obligations, internal control policies, and accounting procedures for the periodic evaluation and adjustment of these reserves.
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