Featured Product

    CMF Issues Rule for Identification of Systemically Important Banks

    November 02, 2020

    CMF issued a regulation for the identification of systemically important banks and the determination of additional requirements for these institutions, in accordance with the international standards and the General Banking Act (LGB). To this end, CMF has incorporated Chapter 21-11 to the Updated Compilation of Rules for Banks (RAN) and has amended Chapter 12-14 of RAN. This is the fifth regulation issued by CMF according to its schedule to implement Basel III standards in Chile. CMF also published a regulatory report evaluating the impact of the regulation, along with a set of frequently asked questions (FAQ) and presentations on the regulation. The regulation will come into force on December 01, 2020.

    The new regulation considers establishing a Systemic Importance Index by entity, based on four factors that reflect the local impact of its financial deterioration or potential insolvency. These factors are size, interconnection, substitutability, and complexity of the entity. Depending on the value of this index, a range is established for additional requirements according to the General Banking Act. The process of identifying systemic banks and determining the additional requirements applicable will be carried out annually. It will be based on the information to be reported by the banks for calculating the Systemic Importance Index. With information as of the end of 2019, it is estimated that six banks would be classified as systemically important and, together, they would require additional core capital of nearly USD 1.25 billion. 

    The results of the process of identifying systemically important banks, and their additional requirements, will be informed through a well-founded resolution with prior agreement of the Central Bank of Chile, as of March 2021. The additional requirements derived from the first application may be constituted gradually, beginning in December 2021 and ending in December 2025 at a rate of an additional 25% per year. Furthermore, interested parties can comment on the measurement file of the systemic importance index to December 02, 2020. Once the fields have been adjusted and published in the Information Systems Manual, all banks must send the information monthly to CMF within the stated timeframes. Until March 01, 2021, banks must send monthly information corresponding to 2020 for the first identification of systemically important banks.

     

    Related Links (in English and Spanish)

    Effective Date: December 01, 2020

    Keywords: Americas, Chile, Banking, Basel, Systemic Risk, General Banking Act, Systemically Important Bank, Regulatory Capital, CMF

    Featured Experts
    Related Articles
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance for New Prudential Standard on Remuneration

    The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.

    October 18, 2021 WebPage Regulatory News
    News

    OCC Updated LIBOR Self-Assessment Tool for Banks

    The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).

    October 18, 2021 WebPage Regulatory News
    News

    TCFD Updates Guidance for Financial Disclosures on Climate Risk

    The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

    October 14, 2021 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.

    October 14, 2021 WebPage Regulatory News
    News

    ACPR Implements Updates Related to DPM Version 3.1

    The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.

    October 14, 2021 WebPage Regulatory News
    News

    EBA Note Examines Transition Risks of Benchmark Rates

    The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.

    October 14, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7571