Journal of the Banking Supervisor No. 69

Tittle: Global and Latin American and Caribbean expectations for the region for 2023

Author: Association of Supervisors of Banks of the Americas

The slowdown in economic activity is an effect occurring in all regions of the world and is limiting the outlook for recovery expected in the short term.

Likewise, inflation has risen well above central bank targets, and the Latin American and Caribbean region has been no exception. Financial pressure on households led the region's central banks to increase reference rates, reaching record highs in some countries and reducing the growth of monetary aggregates. Despite a decrease in inflation expectations and a stabilization in growth rates for 2023, uncertainty due to the war in Ukraine, the downward outlook for growth in China, and a tighter global financing environment could change expectations for 2023.

For their part, Regulatory and Supervisory Authorities should focus on restoring price stability and mitigating the adverse effects of a possible economic contraction in the most vulnerable sectors. On the fiscal front, public debt levels will remain high in a large number of countries. In the context of increased demands for public spending and high-interest rates, the authorities will have to strengthen their fiscal measures to avoid generating a sovereign debt risk that could be transmitted to the financial system. In general, the region is again facing a complex environment where fiscal, monetary and financial policy tools will be essential to counteract a possible adverse shock in the world economy while simultaneously being the precursors through public policies to generate a favorable scenario for recovery. 

In this context, the 69th edition of the Journal of the Banking Supervisor recommends different documents that compile the different global expectations and those of the Latin American and Caribbean (LAC) region for 2023. It also highlights updates, issues, and priorities in regulatory and supervisory matters from different international organizations. In addition, the research and analysis section shares documents on monetary and fiscal issues in the region, as well as an extensive analysis of the region's progress in environmental, social, and corporate governance (ESG) factors.

Finally, in the last section, associate members share news and information on prudential and non-prudential financial regulations issued in their jurisdictions during the third 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 various issues of joint interest in the area of financial regulation.