FSR
The purpose of the Financial Stability Report is to provide information on a semiannual basis concerning recent macroeconomic and financial events that may affect the financial stability of the Chilean economy, such as the evolution of indebtedness of the main credit users, the performance of the capital market, and the capacity of the financial system and of the international financial position to adapt adequately to adverse economic situations. In addition, the Financial Stability Report presents the policies and measures that contribute to the normal functioning of the financial system, in order to promote public knowledge and debate concerning these issues.
The release of the 2021 Financial Stability Reports will be on May 5 th and November 3 th.
Description of the Financial Stability Report
Objective
The financial system contributes to efficient resource allocation, by channeling funds from savers to those with financing needs, a cornerstone of economic growth. However, it is subject to inherent risks, such as liquidity, credit, contagion, and operational risks. Thus, a particular adverse event could become systemic in the face of vulnerabilities that amplify its impact.
The conceptual framework employed by the Bank considers the financial system to be stable when it performs its functions normally or without relevant disruptions, even in the face of temporary adverse situations. In this way, the appropriate identification of potential risk events, vulnerabilities and mitigating factors, along with impact assessments, contribute to the understanding of the stability of the financial system and make it possible to outline policy measures within the Bank’s scope of action, as well as to recommend others that are a springboard for other financial regulators.
In this context, the Financial Stability Report is the main instrument for communicating various diagnoses concerning the state of the financial system. In particular, the Financial Stability Report presents the Board’s view on the main external and local risks to financial stability. It also reviews the most relevant issues in financial regulation at domestic and international level. Thus, the Bank seeks to actively contribute to the stability of the financial system by providing information, risk analysis and warnings concerning trends that deserve greater attention.
Analysis Framework for Financial Policy
Ensuring financial stability requires a prospective and continuous framework of analysis, the final result of which enables the elaboration of a comprehensive diagnosis of potential risks, vulnerabilities and mitigating factors. The objective of this diagnosis is to contribute to the decision-making processes of the financial system’s participants, as well as of regulatory and supervisory institutions.
In general terms, the Bank’s analysis framework consists in monitoring and studying the financial system’s players (households, companies, credit providers), its components (intermediaries, markets and infrastructures), and the interconnections between them. This analysis is highly demanding in terms of data, research, constant monitoring of best practices and international experience, development of analytical tools and interaction with different regulators and players of the financial sector.
The analysis framework considers a continuous process that enables the identification of potential shocks, vulnerabilities that could amplify them and mitigating factors that could limit their scope, thus assessing their potential impact (Figure 1). This process enables the elaboration of diagnoses regarding the state of the Financial System.
Dissemination
The Financial Stability Report has been published semiannually since 2004. Its contents are disseminated through various channels, including presentations to the Senate’s Finance Committee, authorities and other specialized audiences composed by various financial market participants, and to the general public. Likewise, all statistical information contained in the Financial Stability Report is available on the Bank’s website.
Evaluation
The Financial Stability Report is evaluated through surveys carried out on those attending the different presentations. Respondents rated various aspects of the report using a grade scale of 1 to 7.
FSR general appreciation according to surveys (*)
(average, grade in a scale from 1 to 7)
Financial Stability Report First Half 2024
The external scenario continues to be the main source of risks for local financial stability. In a context where global financial conditions remain tight, uncertainty persists about the onset and speed of the monetary tightening cycle in the US, which has affected short-term market rates and may generate abrupt corrections on the high valuation of some financial assets. Additionally, long-term rates remain at high levels and the risks surrounding sovereign debt are relevant globally. The gap between the economic cycles of emerging and developed economies, the high levels of debt and the vulnerabilities in segments of the credit markets can further tighten financial conditions for emerging economies. Global geopolitical tensions remain high and their potential effects on inflation contribute to increasing uncertainty regarding the course of monetary policy in advanced economies. Internally, the economy has resolved the significant macroeconomic imbalances of previous years, although the depth of the capital market remains low. The reduction in inflation and short-term interest rates has contributed to normalizing indebtedness and the financial burden of households and firms, in a context of credit activity in line with the evolution of the economic cycle. The economy is recovering; however some sectors show a lag, which has raised delinquencies to high levels in historical perspective. The banks have managed these developments adequately and preventively, accumulating relevant levels of provisions. Together with appropriate levels of liquidity and capital, this permits banks to adequately withstand stress scenarios. However, banks must continue to prepare for the upcoming challenges they face, associated with the convergence towards Basel III standards. Finally, the external macrofinancial situation highlights the importance of continuing to strengthen the resilience of local agents and the financial market.
What does this IEF tell us?
El escenario externo continúa siendo la principal fuente de riesgos para la estabilidad financiera local.
La economía resolvió gran parte de los desequilibrios acumulados en años previos, pero algunos sectores muestran un rezago en su recuperación.
La banca se encuentra con niveles apropiados de liquidez y capital, lo que le permitiría enfrentar adecuadamente los ejercicios de tensión.
Se requiere continuar fortaleciendo la resiliencia del mercado financiero.
El escenario externo continúa siendo la principal fuente de riesgos para la estabilidad financiera local.
- En un contexto donde las condiciones financieras globales continúan estrechas, persiste la incertidumbre acerca del inicio y velocidad de la reducción de la tasa de política monetaria en EE. UU.
- El desfase entre los ciclos económicos de economías emergentes y desarrolladas, los elevados niveles de deuda y las vulnerabilidades en segmentos de los mercados de crédito pueden estrechar aún más las condiciones financieras para los emergentes.
- Las tensiones geopolíticas mundiales se mantienen elevadas y sus potenciales efectos sobre la inflación contribuyen a aumentar la incertidumbre respecto del curso de la política monetaria en las economías avanzadas.
La economía resolvió gran parte de los desequilibrios acumulados en años previos, pero algunos sectores muestran un rezago en su recuperación.
- La inflación tuvo un rápido descenso desde los máximos de 2022 y se ubica en niveles cercanos a la meta de 3%. El gasto interno se ajustó, disminuyó el déficit de la cuenta corriente y la brecha de actividad se redujo.
- Los indicadores financieros de las empresas que se financian con la banca local presentaron una leve mejora. No obstante, ciertos grupos se encuentran rezagados en su recuperación, como las empresas de menor tamaño, las que obtuvieron créditos Fogape-Covid y de los sectores Comercio, Construcción e Inmobiliario, lo cual ha llevado a aumentos en su impago.
- La situación financiera de los hogares también se ha ido estabilizando, en un contexto de aumento de los ingresos y reducción de la carga financiera, dadas las menores tasas de interés en créditos de corto plazo.
La banca se encuentra con niveles apropiados de liquidez y capital, lo que le permitiría enfrentar adecuadamente los ejercicios de tensión.
- La actividad crediticia permanece con dinamismo acotado, acorde con el ciclo macroeconómico local.
- Los bancos han gestionado el aumento del riesgo de crédito acumulando niveles relevantes de provisiones y mayores garantías.
- Con todo, la banca deberá continuar preparándose para los próximos desafíos que enfrenta, asociados a la convergencia hacia Basilea III.
Se requiere continuar fortaleciendo la resiliencia del mercado financiero.
- La situación macrofinanciera externa releva la importancia de seguir fortaleciendo la resiliencia de los agentes locales y del mercado financiero
- La incertidumbre respecto del control de la inflación y sus efectos sobre la política monetaria en EE. UU., junto con otras fuentes de riesgo, hacen prever que las condiciones financieras pudieran mantenerse ajustadas por un tiempo prolongado.
- A nivel local, la resolución de los significativos desequilibrios macroeconómicos ha permitido mejorar la posición financiera de los agentes locales, aunque ciertos sectores permanecen rezagados.
- La profundidad del mercado financiero continúa en niveles bajos, lo que ha reducido la capacidad de la economía para amortiguar shocks externos. Así, se requiere continuar fortaleciendo la resiliencia del mercado financiero