Functions of the Central Bank of Chile

The Board

The maximum authority of the Central Bank is the Board, which is responsible for directing and managing the Bank, exercising all the faculties and attributes granted under the basic constitutional law that created it.

The Board is composed of five members appointed by the national president, with approval from the senate. These appointments last for ten years, members can be reappointed for another period of the same duration, and positions are renewed every two years. The Governor of the Board and the Bank is appointed by the president of Chile from among the Board members for a period of five years, or for the lesser period remaining in her or his term as board member. The Board itself elects the vice-governor from among its members and this person remains in this position for as long as her/his appointment to the Board lasts. Both governor and vice-governor can be reelected.

The Board can only function with the presence of three of its members and its motions must be approved by a majority of those present. In the case of a tie, the Governor of the Board casts the deciding vote.

The position of Board member requires exclusive dedication and is not compatible with any other activity, remunerated or otherwise, in the private or public sectors, except for teaching or academic labors.

Board members can be removed through accusation to the Court of Appeals of Santiago, based on the argument that the respective board member has intervened or voted on resolutions that influence credit operations, investments or other business in which s/he or spouse, or relatives to the third degree or the second degree once removed, have a proprietary interest; or in which the board member has been involved in conduct that involves an abuse of her/his quality as such in order to obtain for her/himself or third parties, direct or indirect benefits.

Similarly, the President of the Republic, with prior approval of the Senate, can remove a board member who holds the position of Governor of the board and Bank, upon receiving a well-founded petition from at least three members, for reasons of incompliance with the policies adopted or the rules applied by the Board.

Finally, the President of the Republic, also with prior approval of the Senate, is empowered to remove any or all board members, based on a situation where the board member in question has voted for Bank motions that imply a grave and obvious incompliance with its objectives and provided that this motion has been the main and direct cause of serious damage to the country's economy.

Central Bank Structure

The current basic law of the Central Bank has defined the functions of the general manager, the general counsel and the general auditor, as well as the governor and vice-governor.

The general manager is responsible for managing the Bank, the general counsel must ensure that Bank motions, resolutions and contracts fall within the law, and the general auditor must inspect and enforce Bank accounts, operations and rules. Both the general manager and the general counsel have the right to voice in the Board.

The basic structure of the Central Bank is flexible, so as to be able to adapt to the different requirements made of it.