Chile: 2010 Article IV Consultation-Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Chile
IMF Staff Country Reports, September 29, 2010
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- Chile: 2010 Article IV Consultation-Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Chile
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Bibliographic details
- Published: September 29, 2010
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781455208371.002
Executive summary
- Chile’s economy has withstood successfully two consecutive large negative shocks—the global financial crisis and the February 2010 earthquake.
- The financial system has weathered the crisis well and the cyclical deterioration of credit quality has been moderate.
- Large-scale private and public reconstruction spending should continue to boost growth.
- The authorities’ intentions to enhance the supervision of the financial sector, including the planned move toward consolidated supervision of financial conglomerates, are encouraged.
- The prudential framework is strengthened by adopting a functional approach to regulation and supervision.
Key findings
- Economic resilience: Two major shocks (the global financial crisis and the February 2010 earthquake) were absorbed with limited systemic financial disruption.
- Financial sector performance: The financial system weathered the crisis well; cyclical deterioration of credit quality was moderate.
- Reconstruction impact: Large-scale private and public reconstruction spending is expected to continue supporting economic growth.
- Regulatory developments: Authorities plan to enhance supervision of the financial sector, including a move toward consolidated supervision of financial conglomerates.
- Prudential framework: Adoption of a functional approach to regulation and supervision has strengthened the prudential framework.
Policy recommendations and implications
- Strengthen supervision: Support for authorities’ intentions to enhance financial sector supervision and move toward consolidated supervision of financial conglomerates.
- Maintain prudential focus: Continue adopting and implementing a functional approach to regulation and supervision to reinforce financial stability.
- Support reconstruction-led growth: Monitor and manage large-scale private and public reconstruction spending to sustain growth while safeguarding fiscal and financial stability.