CMF Designates Six Banks as Systemically Important
The Board of the Financial Market Commission (CMF) decided that six banks retain their systemic status since the last assessment in March 2021. These banks are Banco de Chile, Banco de Crédito e Inversiones, Banco del Estado de Chile, Banco Santander-Chile, Itaú-Corpbanca, and Scotiabank Chile.
CMF approved Resolution No. 2044 on the rating of systemically important banks. This is pursuant to the provisions of the General Banking Act and its regulations regarding identification of systemic banks contained in Chapter 21-11 of the Updated Compilation of Rules for Banks. Regulations published by CMF for the implementation of Basel III standards in Chile consider implementing a systemic importance index by entity. This index is based on four factors reflecting the impact that their financial deterioration or eventual insolvency would cause. These factors are the size of the bank, the Interconnection of the bank with other financial entities, degree of substitution in its provision of financial services, and complexity of business model and operating structure.
The identification of systemic banks as well as the determination of additional applicable requirements will be carried out annually and based on information submitted by banks themselves. Considering the COVID-19 pandemic, the CMF Board has postponed the implementation of additional requirements "deriving from the said classification in April 2020." As a result, higher core capital requirements for systemically important banks are in force for the first time this year. They will gradually increase at a rate of 25% per year between December 2022 and December 2025. Pursuant to current regulations, CMF imposed additional core capital requirements of 1% for Itaú-Corpbanca; 1.25% for Banco de Chile, Banco del Estado de Chile, and Scotiabank Chile; and 1.5% for Banco de Crédito e Inversiones and Santander-Chile. In accordance with their gradual implementation, the requirements due in December 2022 will equal 0.25 of these percentages.
Related Links
- Press Release
- Resolution No. 2044 (PDF in Spanish)
- Chapter 21-11 of Updated Compilation of Rules for Banks (PDF in Spanish)
Keywords: Americas, Chile, Banking, Systemic Risk, D-SIBs, Basel, Regulatory Capital, CMF
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
ECB Updates Policy on Options and Discretions Under Basel RulesRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
