The Venezuelan Financial System. What Compromises Its Performance?

Ana Maria A. Chirinos L; Carolina Pagliacci

doi:10.4067/S0718-88702014000200003

Authors

Ana Maria A. Chirinos L Banco Central de Venezuela
Carolina Pagliacci Banco Central de Venezuela

DOI:

https://doi.org/10.4067/S0718-88702014000200003

Keywords:

Dynamic factor model, macroeconomic shocks, sign restrictions, financial risk

Abstract

The objective of this paper is to empirically test the deleveraging of the Venezuelan financial system at the event of two contractive shocks, a monetary and an oil shock, and to characterize the types of risks that arise in each case. Although these shocks have similar effects on interest rates and deposits, the adverse consequences and implicit risks for the oil shock are greater, due to its shrivelling effect on real activity and public finances.

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