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.
- 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
Previous ArticleECB Publishes Guide on Notification of Securitization Transactions
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.