## Chile: Financial System Stability Assessment

_IMF Staff Country Reports, December 9, 2021_

## Source details

**Canonical URL:** [Chile: Financial System Stability Assessment](https://www.imf.org/en/publications/cr/issues/2021/12/09/chile-financial-systems-stability-assessment-510866)

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## Bibliographic details
- Published: December 9, 2021
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781616356958.002

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### Summary findings
- The financial system in Chile functions well overall within a sound regulatory framework.
- The sector features large and deep financial markets, is dominated by conglomerates, includes six systemic banks, and has pension funds.
- The twin shocks of social unrest in late 2019 and COVID-19 were adeptly managed thanks to massive and well-coordinated supervisory and fiscal policy responses, as well as unprecedented liquidity support from the Central Bank of Chile (BCCh).
- Banks have remained profitable through the crisis, partially supported by central bank financing and government-guaranteed SME lending.
- The funded pension system is under threat in part due to a series of withdrawals; Congress has also authorized life annuity liquidations.
- A major reorganization of the financial regulatory authorities has been finalized.
- Basel III will be implemented starting in December 2021.

### Shocks and policy response
- Shocks:
  - Social unrest in late 2019.
  - COVID-19 pandemic.
- Policy response:
  - Massive and well-coordinated supervisory and fiscal policy responses.
  - Unprecedented liquidity support from the Central Bank of Chile (BCCh).
  - Central bank financing and government-guaranteed SME lending that partially supported bank profitability.

### Financial sector structure and vulnerabilities
- Structure:
  - Large and deep financial markets.
  - Sector dominated by conglomerates.
  - Six systemic banks.
  - Funded pension system and pension funds important for market deepening.
- Vulnerabilities:
  - Funded pension system threatened by a series of withdrawals.
  - Life annuity liquidations authorized by Congress pose additional pressures.

### Regulatory developments
- A major reorganization of the financial regulatory authorities has been finalized.
- Basel III implementation scheduled to start in December 2021.

### Publication and metadata
- Publication title: Chile: Financial System Stability Assessment
- Date: December 9, 2021
- Pages: 111
- Volume: 2021
- Issue: 262
- Series: Country Report No. 2021/262
- DOI: https://doi.org/10.5089/9781616356958.002
- Stock No: 1CHLEA2021006
- ISBN: 9781616356958
- ISSN: 1934-7685
- Subjects: Expenditure; Financial institutions; Financial Sector Assessment Program; Financial sector policy and analysis; Financial sector stability; International organization; Monetary policy; Mutual funds; Pension spending; Stress testing
- Keywords include: bank funding dynamics; bank resolution arrangement; bank resolution mechanism; bank solvency stress test result; bank stress test scenario; Caribbean; Financial Sector Assessment Program; Financial sector stability; Global; IMF mission chief; Mutual funds; Pension spending; Stress testing

*IMF Staff Country Report: "Chile: Financial System Stability Assessment", Country Report No. 2021/262 (December 9, 2021).*

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## Content in this bundle

- **Chile: Financial Systems Stability Assessment; IMF Country Report No. 21/262; November 17, 2021**
  - [Chile: Financial Systems Stability Assessment; IMF Country Report No. 21/262; November 17, 2021 (Markdown version)](/-/media/files/publications/cr/2021/english/1chlea2021006.pdf.md){rel="alternate" type="text/markdown"}
  - [Chile: Financial Systems Stability Assessment; IMF Country Report No. 21/262; November 17, 2021 (PDF)](/-/media/files/publications/cr/2021/english/1chlea2021006.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2021/12/09/chile-financial-systems-stability-assessment-510866_