CMF has designated six banks to be systemically important and these are Banco de Chile, Banco de Crédito e Inversiones, Banco del Estado de Chile, Banco Santander-Chile, Itaú Corpbanca, and Scotiabank Chile. CMF recently approved a resolution on the "qualification" of systemically important banks, as established by the General Banking Act (LGB) and its regulations for the identification of systemic banks contained in Chapter 21-11 of the Updated Compilation of Rules for Banks (RAN).
The CMF regulations for the implementation of Basel III standards in Chile require building a systemic importance index for each entity. The index is based on four factors that reflect the impact of the financial deterioration or eventual insolvency of each entity. These factors are the size of the bank, the interconnection of bank with other financial entities, the degree of substitution in provision of financial services, and the complexity of business model and operating structure. The identification of systemic banks and the determination of additional applicable requirements will be done annually, based on the information that banks must report. Considering the COVID-19 pandemic, the CMF Board had postponed implementation of some of the requirements associated with Basel III framework in Chile. The core capital requirements resulting from the identification of systemic banks were delayed by a year; these requirements are slated to gradually increase at a rate of an additional 25% per year between December 2022 and December 2025.
Keywords: Americas, Chile, Banking, Basel, Regulatory Capital, D-SIBs, Systemic Risk, CMF
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