The Global Financial Crisis and its Impact on the Chilean Banking System

Author/Editor:

Jorge A Chan-Lau

Publication Date:

April 1, 2010

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper explores how the global turmoil affected the risk of banks operating in Chile, and provides evidence that could help strengthen work on vulnerability indicators and off-site supervision. The analysis is based on the study of default risk codependence, or CoRisk, between Chilean banks and global financial institutions. The results suggest that the impact of the global financial crisis was limited, inducing at most a one-rating downgrade to banks operating in Chile. The paper concludes by assessing government measures aimed at reducing systemic risk in the domestic banking sector and the recommendations to allocate SWF assets to domestic banks.

Series:

Working Paper No. 2010/108

Subject:

Bank deposits Banking Commercial banks Debt default Foreign banks

English

Publication Date:

April 1, 2010

ISBN/ISSN:

9781455200672/1018-5941

Stock No:

WPIEA2010108

Pages:

21

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