Featured Product

    CMF Designates Six Banks as Systemically Important

    March 30, 2022

    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

     

    Keywords: Americas, Chile, Banking, Systemic Risk, D-SIBs, Basel, Regulatory Capital, CMF

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582