{ "title": "IMF Executive Board Concludes Financial System Stability Assessment with Chile", "publication": "IMF News, December 9, 2021", "sourceUrl": "https://www.imf.org/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile", "canonical": "https://www.imf.org/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile", "overlayPath": "/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile/index.md", "summary": "Press Release No. 21/367", "publishDate": "2021-12-09", "sections": [ { "heading": "Press and procedural details", "content": "- Press Release No. 21/367\n- Date: December 9, 2021\n- IMF Communications Department, MEDIA RELATIONS\n- PRESS OFFICER: David Sharrock\n- Phone: +1 202 623-7100\n- Email: MEDIA@IMF.org\n- The Executive Board concluded the FSAP with Chile on December 3, 2021 without a meeting under the lapse-of-time procedure." }, { "heading": "Scope, missions, and report timing", "content": "- Financial Sector Assessment Program (FSAP) remote missions to Chile during March-April and July-August 2021.\n- Financial Sector Stability Assessment (FSSA) report completed on November 17, 2021.\n- The FSAP is a comprehensive assessment established in 1999; FSAPs are mandatory for the 47 jurisdictions with systemically important financial sectors and otherwise conducted upon request. Key findings are summarized in an FSSA." }, { "heading": "Overall assessment", "content": "- Conclusion: The financial system in Chile functions well overall within a sound regulatory framework.\n- The FSSA found that the twin shocks of social unrest in late 2019 and COVID-19 were adeptly managed due to:\n - Massive and well-coordinated supervisory and fiscal policy responses.\n - Unprecedented liquidity support from the Central Bank of Chile (BCCh)." }, { "heading": "Liquidity risks and recommended reforms", "content": "- Events noted:\n - Mutual and pension fund redemptions during 2019.\n - Subsequent BCCh crisis measures used to relieve shock impacts highlighted structural liquidity risks.\n- Recommendations:\n - Strengthen the liquidity management framework for mutual funds.\n - Develop the interbank repo market.\n - Strengthen central bank risk management practices." }, { "heading": "Pension system findings and recommendations", "content": "- Observation: The funded pension system, instrumental in market deepening, is under threat in part due to a series of withdrawals.\n- Recommendations:\n - Halt further pension withdrawals and life annuity liquidations.\n - Improve pension fund regulation and investment options to promote long-term investment and minimize excessive portfolio switching." }, { "heading": "Regulatory reorganization and Basel III", "content": "- Important reorganization of the financial regulatory authorities has been finalized.\n- Basel III will be implemented starting in December 2021.\n- Banking supervisory framework: found to be robust but needs further improvements in areas including consolidated supervision and some aspects of credit risk." }, { "heading": "Banking sector resilience and policy advice", "content": "- Banks remained profitable through the crisis, partially supported by:\n - Central bank financing.\n - Government-guaranteed SME lending.\n- FSAP findings and recommendations:\n - The banking sector is sufficiently capitalized overall.\n - Banks should ensure continued resilience by transitioning to Basel III-compliant capital structures and completing announced capital raises.\n - Pandemic-related measures should be carefully withdrawn when appropriate.\n - Introduce a bank resolution mechanism and deposit insurance.\n - Implement a risk-based capital framework for insurers.\n\nIMF press release: IMF Executive Board Concludes Financial System Stability Assessment with Chile (Press Release No. 21/367), December 9, 2021.\n\n---\n\n\n References\n\n- Chile and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile" } ], "bullets": [ "[Markdown version](/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile/index.md)", "[Structured JSON version](/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile/index.json)", "[Bundle manifest](/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile/bundle-manifest.json)", "Published: December 9, 2021", "Press Release No. 21/367", "Date: December 9, 2021", "IMF Communications Department, MEDIA RELATIONS", "PRESS OFFICER: David Sharrock", "Phone: +1 202 623-7100", "Email: MEDIA@IMF.org", "The Executive Board concluded the FSAP with Chile on December 3, 2021 without a meeting under the lapse-of-time procedure.", "Financial Sector Assessment Program (FSAP) remote missions to Chile during March-April and July-August 2021.", "Financial Sector Stability Assessment (FSSA) report completed on November 17, 2021.", "The FSAP is a comprehensive assessment established in 1999; FSAPs are mandatory for the 47 jurisdictions with systemically important financial sectors and otherwise conducted upon request. Key findings are summarized in an FSSA.", "Conclusion: The financial system in Chile functions well overall within a sound regulatory framework.", "The FSSA found that the twin shocks of social unrest in late 2019 and COVID-19 were adeptly managed due to:", "Events noted:", "Recommendations:", "Observation: The funded pension system, instrumental in market deepening, is under threat in part due to a series of withdrawals.", "Recommendations:", "Important reorganization of the financial regulatory authorities has been finalized.", "Basel III will be implemented starting in December 2021.", "Banking supervisory framework: found to be robust but needs further improvements in areas including consolidated supervision and some aspects of credit risk.", "Banks remained profitable through the crisis, partially supported by:", "FSAP findings and recommendations:", "[Chile and the IMF](http://www.imf.org/external/country/CHL/index.htm)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile/index.md", "json": "/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile/index.json", "bundleManifest": "/en/news/articles/2021/12/09/pr21367-imf-executive-board-concludes-financial-system-stability-assessment-with-chile/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T00:50:14.167Z" }