## Chile: Technical Assistance Report-Strengthening Systemic Liquidity Management

_Technical Assistance Reports, May 7, 2025_

## Source details

**Canonical URL:** [Chile: Technical Assistance Report-Strengthening Systemic Liquidity Management](https://www.imf.org/en/publications/technical-assistance-reports/issues/2025/05/07/chile-technical-assistance-report-strengthening-systemic-liquidity-management-566717)

## Other formats

- [Markdown version](/en/publications/technical-assistance-reports/issues/2025/05/07/chile-technical-assistance-report-strengthening-systemic-liquidity-management-566717/index.md)
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## Bibliographic details
- Published: May 7, 2025
- Series: Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798229009126.019

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### Executive summary
- Evaluates four key areas impacting the efficiency and resilience of Chile's financial sector: central bank collateral policy, emergency liquidity assistance (ELA), systemwide market support programs, and repo market development.
- Recommends targeted reforms and coordination to strengthen preparedness, decision-making, and market functioning.
- Notes effective BCCh operations during social unrest and the COVID-19 pandemic of 2019–20 to stabilize core markets.

### Central bank collateral policy
- Introduce a collateral framework with:
  - eligibility criteria,
  - valuation procedures,
  - risk mitigation measures.
- Differentiate collateral practices for:
  - monetary policy operations, and
  - ELA/systemwide support.

### Emergency Liquidity Assistance (ELA) framework and internal preparedness
- Establish an ELA framework that includes:
  - internal procedures,
  - transparency measures.
- Create an internal ELA Working Group to standardize and ensure preparedness and efficient decision-making by developing:
  - a request letter,
  - an ELA master agreement,
  - funding templates.
- Develop ELA policy parameters, including:
  - duration,
  - interest rate,
  - potential conditionality.

### Institutional coordination and crisis governance
- BCCh, CMF, and MoF should establish a Crisis Management Group to ensure clarity about their respective roles.

### Systemwide market support programs: design principles
- Future programs should adhere to key principles:
  - use discretionary intervention triggers based on market indicators,
  - price operations to encourage initial take-up and facilitate exit,
  - prefer temporary operations to limit risks,
  - ensure transparency to promote effectiveness and accountability.

### Repo market development: constraints and strategy
- Identifies legal, regulatory, taxation, accounting, and infrastructure issues constraining repo market activity.
- Issues span multiple government agencies and the private sector.
- BCCh should coordinate with relevant stakeholders to formulate a comprehensive medium-term market development strategy to address these challenges.

### Historical experience informing recommendations
- During the social unrest and COVID-19 pandemic of 2019–20, the BCCh implemented effective measures to stabilize core markets—lessons from these episodes inform recommended frameworks and principles.

### Publication and key statistics
- Pages: 61
- Volume: 2025
- Issue: 048
- Series: Technical Assistance Report No. 2025/048
- Stock No: TAREA2025048
- DOI: https://doi.org/10.5089/9798229009126.019
- ISBN: 9798229009126
- ISSN: 3005-4575

*International Monetary Fund. Monetary and Capital Markets Department "Chile: Technical Assistance Report-Strengthening Systemic Liquidity Management", Technical Assistance Reports 2025, 048 (2025).*

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## Content in this bundle

- **Preface — Mission, context, and sector snapshot**
  - [Preface — Mission, context, and sector snapshot (Markdown version)](/-/media/files/publications/tar/2025/english/tarea2025048-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Preface — Mission, context, and sector snapshot (PDF)](/-/media/files/publications/tar/2025/english/tarea2025048-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/technical-assistance-reports/issues/2025/05/07/chile-technical-assistance-report-strengthening-systemic-liquidity-management-566717_