The characteristics of the crisis and the structural changes that have occurred in the economic-financial field since the last quarter of 2001 -as will be described in detail in the following sections-, as well as the restrictions on the availability of relevant information that existed for a large part of 20021, led to important modifications in this edition of the Monetary and Financial Bulletin.

The first change refers to the period covered by the analysis carried out here, being in this particular edition the whole of 2002. On the other hand, it is anticipated that some new sections were included, while others have modified their content, in order to generate some adaptation to the changes that have occurred in the context of the operation of the financial system.

The Bulletin begins with a section aimed at a brief review of the evolution of the crisis, presenting as an introduction the most recent economic and financial developments. It continues with the analysis of the international economy, the real economy and the domestic capital market during 2002, thus recreating the main characteristics of the macroeconomic context in which the local financial system had to interact.

In the following section, attentive to the intensity of the reforms in the regulatory plexus that occurred throughout 2002 – involving laws, decrees and resolutions of the P.E.N. and regulations of the Central Bank – a compilation and analysis of the main changes with effects on the financial system is made. Subsequently, and on the basis of the greater scope for the formulation and exercise of an active monetary policy resulting from the radical change in the exchange rate regime and the subsequent amendments to the Organic Charter, the Monetary Programme for 2002 is concisely presented.

The following is an analysis of the observed evolution of the main monetary aggregates in the context of the aforementioned institutional changes. The examination of the main changes in the banking sector is carried out in the last section, bearing in mind the context defined in the previous sections. Given the aforementioned limitations on the availability of information, an attempt is made to examine in particular both the changes observed during the year and the conditions for future developments in the conditions of liquidity, solvency and profitability of the sector.