The Day at a Glance | December 27 2023

*The Financial Stability Council updates its risk assessment. 

*Chinese commercial banks may further cut deposit rates to protect their margins and reduce debt costs. 

*China’s industrial profits show double-digit increases, but the recovery is uneven. 

*Spain extends its anti-inflation measures through 2024. 

Economic environment

The Financial Stability Council (CESF for its acronym in Spanish) updated its risk assessment, highlighting monetary policy and global geopolitical events as the main risks. In its year-end review, the CESF emphasized that global growth prospects for 2024 were revised downward slightly in an environment characterized by lower inflationary levels and stable financial markets. However, there are still risks to global financial stability due to the possibility of monetary policy remaining restrictive for a longer period – as well as geopolitical tensions. In Mexico, financial markets have performed favorably, with the peso strengthening, and interest rates decreasing. National economic activity has expanded robustly, although future weakening is expected. Mexico´s financial system shows resilience, with solid capital and liquidity levels in commercial banking. Some non-banking intermediaries face challenges but do not pose a systemic risk. The Risk Perception Survey highlights concerns about higher-than-expected inflation. In the next regular session, the Financial Stability Council will present its Annual Report. The Financial Stability Council is a body composed of the Ministry of Finance and Public Credit, the Central Bank of Mexico, the National Banking and Securities Commission, the National Insurance and Bonding Commission, the National Commission for the Retirement Savings System, and the Institute for the Protection of Bank Savings.

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