Alfredo Thorne, partner at Global Source and former Peruvian finance minister: “Banking systems typically have been the Achilles’ heel at times of sudden shocks, but recent reports from banking and insurance regulator Superintendencia de Banca y Seguros (SBS) indicates that this may not be the case this time. Certainly, the political confrontation and the absence of political will to strengthen the economic fundamentals may weaken banks’ balance sheets. Moreover, the recent decision by Moody’s Investors Service to change its outlook on banks to negative from stable anticipates a wave of rate cuts by the three agencies. Close inspection at SBS’ reports indicate that there are four characteristics that confirm that banks have room to withstand these shocks. First, the most solid portion of the banking system are the deposit-taking banks accounting for 89 percent of the total banking system assets last December. The weak spot has been…”