Mark to Market

What it is about

Enmanuel Cedeño Brea, moderator of the mark-to-market panel at the Third Annual Risk Conference (September 19, 2025), presented the regulatory path of fair value in the Dominican Republic and the strategy proposed by the Superintendency of Banks to implement it.

The 9 slides use the analogy of a blood test (no serious doctor would decide with outdated results), recall that since 2019 the IMF has pointed to the need to update banking regulation, review the four postponements of the entry into force of fair value and the 2022 suspension, and summarize the 2025 implementation strategy.

Objectives

• Explain with an analogy why fair value is useful to know the real situation of financial instruments.
• Reconstruct the timeline of fair value postponements in Dominican regulation.
• Summarize the gradual implementation strategy proposed by the Superintendency of Banks.

Key takeaways

1. Fair value reveals the market value of financial instruments, as a blood test reveals levels that are not visible to the naked eye.
2. The entry into force of fair value, originally planned for January 1, 2019, was postponed four times and suspended indefinitely in 2022.
3. The IMF has pointed since 2019 to the need to update banking regulation and, in its most recent note, assessed favorably that the country has done so.
4. The proposed strategy allows a single reclassification of portfolios according to business model by June 30, 2025 at the latest.
5. It includes a "synthetic" fair value period with daily monitoring and the possibility of selling up to 30% of securities at amortized cost, plus a regime for gradually absorbing the impact on the solvency ratio.