Journal of the Banking Supervisor No. 67

Incorporation of technological tools for stronger supervision in the region

Global financial markets performed relatively well in 2021, despite some volatility leaps linked not only to the pandemic, but also to the increasing uncertainty about the inflation outlook and the likely reduction monetary stimulus worldwide.

However, according to the IMF’s World Economic Outlook, the world enters 2022 with global baseline risks tilted to the downside. Elevated inflation is expected to persist for longer than anticipated with ongoing supply chain disruptions. Furthermore, the conflict in Eastern Europe put important pressures to the world and to the region. Particularly, high commodity prices might spur inflation in Latin America and the Caribbean, which already faces an 8 percent average annual rate across five of the largest economies: Brazil, Mexico, Chile, Colombia, and Peru.

Moreover, the combination of global circumstances have raised important regulatory interest in terms of technology adoption in the financial sector. While the pandemic accelerated the adoption of digital financial technologies, the raise of novel instruments such as cryptoassets, and the appearance of new players, they also have increased the attention in the operational risk of entities and the systemic risks of the financial system, in general. What is more, as the conflict in Eastern Europe advances, there are heightened concerns about the cybersecurity risks and their spillovers throughout the globe.

In this context, the 67th edition of the Journal of the Banking Supervisor presents some relevant texts on adjustments, guidelines and concerns in banking regulation. The first section highlights some guidelines and principles recently published by ASBA that provide an overview of the lessons learned from the regulatory facilities implemented in the region's financial sector to address Covid-19 and a reference for the Association members on general considerations for cross-border memoranda of understanding. The second section, on the economic outlook for the region, includes some references to the topics of economic performance expectations for 2022 and progress in the implementation of international standards.

The research and analysis section shares documents on regulation and analysis of the payment infrastructures of some countries in the region, as well as the incorporation of technological issues in the central supervisory activities. Finally, in the last section, associate members share news and information on prudential and non-prudential financial regulation issued in their jurisdictions during the first 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 of joint interest in the area of financial regulation.