Since the last Financial Stability Report (FSR), financial conditions have remained favorable worldwide, and global economic activity shows signs of recovery, while numerous support policies are still in place in many economies. At the local level, the action of different authorities, including the Central Bank of Chile (CBC), and the prudent operation of the financial sector, made it possible to contain the risks to financial stability derived from the unusual shock generated by the Covid-19 pandemic. Thus, unlike previous crises, the cost of financing has remained low, delinquency rates are contained, and credit has continued to flow, although with a recent slowdown. In this context, economic growth showed a significant recovery after a deep retrenchment in the second quarter of 2020, allowing a sizable portion of firms, households, and banks to recover financial strength and be better prepared to withstand stress scenarios with respect to the previous FSR. However, compared to two years ago the situation remains deteriorated, since credit users —households, non-financial companies, and the government— have seen their net worth eroded. This stems from higher leverage or lower savings, especially in economic sectors whose activity has been more sensitive to mobility restrictions. Onwards, various risk factors persist due to the unusual shock caused by the pandemic and the uncertainty related to its evolution. In this sense, abrupt long-term rate adjustments in developed economies, or a deterioration in emerging economies preventing them from keeping pace with the global recovery, may affect local financing conditions. The main challenge for economies such as Chile, where the vaccination process and the economic recovery is moving forward, will be to achieve an adequate balance between policies that underpin the growth seen so far and the necessary recovery of financial margins in the medium-term.