CMF Designates Six Banks as Systemically Important

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