Journal of the Banking Supervisor No. 65

Banking as a Long-Term Recovery Tool

The global economic crisis caused by COVID-19 interrupted a period of sustained growth in Latin America and the Caribbean that had not been observed for decades. However, unlike other crises experienced in the past, the region is much better prepared to face it. Banking is seen as an important part of the solution, and not as part of the problem. Today the banking sector is not the center of the problems, neither its solvency is compromised, nor its risk levels are at high levels. It is in a position to be a positive protagonist and the Financial Authorities have opted to use the banks as a key tool to channel their measures towards a recovery with immediate effects and that lays the foundations for sustained long-term growth.

Financial Authorities have the double task of stabilizing economic growth in countries with countercyclical measures and devising instruments to protect the most vulnerable population from negative distributional impacts. However, regulators and supervisors are aware that, even with the measures that have been implemented, there are potential risks for the following years and the economic recovery, especially in the worst affected poverty deciles, will take time.

In this context, the 65th edition of the Journal of the Banking Supervisor analyzes some relevant texts on adjustments, guidelines, and concerns in banking regulation. The guides referring to the technical modifications on the reduction of operations in securities financing, good practices on procedures and disclosure on the sustainability of asset management are highlighted.

The section on Market Outlooks and Reviews includes documents related to the difficult and heterogeneous economic recovery in the world. The documents from BIS, OECD and the World Bank stand out where they broaden the issue of inequality in the recovery, the macroeconomic situation that is expected for the second half of 2021 and some risks that are beginning to take relevance in the world. In the Research and Analysis section, documents focused on issues of Financial Stability, Financial Inclusion, Sustainability and Climate Change were included.

Finally, Associate Members were asked for information on prudential and non-prudential financial regulations issued in their countries during the second quarter of the year. This compilation is an effort to broaden communication and understanding among the countries of the Americas on the approaches used to address different issues that are of joint interest in the area of financial regulation.

Categories: Journal of the Banking Supervisor
Author: ASBA