Report on the status of implementation of the Basel standards in Latin America and the Caribbean 2022
The report shows the most important findings with regards to the implementation status of the Basel standards, and the potential importance of developing a proportional regulatory framework in the region.
The report is divided into three sections. The first section provides a general perspective on regulation, including the main Basel framework on which regulation is based in the different jurisdictions and how the region applied proportionality in regulation. The second section examines the standards’ implementation status corresponding to Pillar 1 of the Basel standards. That is, the definition of regulatory capital, capital requirements for risk coverage, and leverage. Finally, the third section analyzes the implementation of the four main principles that comprise Pillar 2 of the Basel standards.
Financial Education from a Regulation and Supervision Approach
In recent years, several Emerging Market Economies have made efforts for increasing financial education, especially through developing national strategies of financial education and inclusion. Notwithstanding, there is still not a clear common agreement about the role of financial regulators and supervisors among these strategies.
The Association of Supervisors of Banks of the Americas (ASBA), supported and financed by the German Foundation Sparkassenstiftung Für Internationale Kooperation joined to analyze the relation between the financial education initiatives developed in the region and the financial regulation and supervision. For understanding this relation, ASBA set up a Working Group aiming at developing principles for addressing financial education issues form a regulation and supervision approach. These principles will enable authorities to assess their current status in the roadmap towards an effective implementation of financial education initiatives and will provide them a toolbox for enhancing their skills and technical resources, and thus boost their implementation processes in a strategic and sustainable fashion.
Status: Finalized
Members: Colombia, Costa Rica, Honduras, Guatemala, Paraguay, Perú y Uruguay.
Documents
Regulation for Responsible and Competitive Financial Sector Innovation Project
The objective of the meeting was to show the progress of the work carried out by the consultants in Components I and II of the project, as well as to collaborate through the exchange of regional experiences in conduct risk, user protection and transparency of innovative financial products among ASBA Members, as well as the development of guidelines and recommendations for the responsible and competitive adoption of technological financial innovations operating in the Americas.
The meeting consisted of three sessions that addressed the challenges arising from the increase of FinTech in different countries, as well as possible impacts on the financial system. The discussion allowed a constant feedback of supervisory experiences and approaches between different jurisdictions.
The first session presented a summary of the most important points found in Components I and II, followed by presentations of the working group to share experiences. The second session focused on the preconditions for the incorporation of innovative financial products. Likewise, the exchange of regional experiences on considerations of prudential issues and prevention of financial crimes continued. In the last session, three FinTech stakeholders shared with the Working Group the functioning of their business models, as well as their perspectives and concerns about the Law to Regulate Financial Technology Institutions of Mexico.
Status: Finalized
Members: Bolivia, Brazil, Chile, Costa Rica, Curaçao, Spain, Honduras, Mexico, Panama and Peru..
Competitive Financial Sector Innovation Project
ASBA-IADI Project
ASBA and IADI’s Committee for Latin America (CLAR) agreed to analyze the relationship between bank supervisors and deposit insurers in Latin America. To this end, they organized a working group that shall produce a document on the best practices for the resolution of financial entities in the Americas. This group has representatives from both institution coming from Brazil, Chile, Costa Rica, El Salvador, Guatemala, Mexico, Paraguay, Peru, the United States and Uruguay.
Status: Finalized
Members: Brazil, Chile, Costa Rica, El Salvador, Guatemala, Mexico, Paraguay, Peru, the United States and Uruguay.
Documents
and Resolution Frameworks in the Americas.