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 Second Half 2023
The risks of the external macrofinancial scenario have increased compared to the previous Report. Short and long-term interest rates have risen significantly, responding to the reacceleration of the US economy and inflation, and concerns about the fiscal situation in that country. Added to a complex geopolitical context, the outlook for the global economy continues to be a relevant source of risk. If a scenario of higher long-term interest rates intensifies, with a prolonged monetary adjustment in advanced economies, financial conditions for emerging economies will tighten even further. Although there have been no new tensions in the financial systems of advanced economies, vulnerabilities remain in some segments. Internally, the resolution of macro imbalances continues to advance, which puts the Chilean economy on a better footing in the face of the deterioration of the global scenario. In addition to the reduction in inflation and short-term interest rates, there has been a reduction in corporate indebtedness and a normalization of the financial indicators of credit users. In any case, heterogeneity is observed between the different actors in the economy. Credit activity remains low, consistent with the state of the cycle, while the cost of credit began to fall especially at terms in which a less restrictive monetary policy has greater impact. Local banks have sufficient liquidity, provisions and capital to face severe stress scenarios. However, like the rest of agents, it is important that it continues to strengthen its capabilities to face new adverse events. They also need to continue preparing the expiration of support policies established during the pandemic (FCIC), increased credit risk, and the convergence to Basel III standards. A deterioration in external financial conditions represents the main risk for local borrowers and lenders. This reaffirms the need to continue adopting measures aimed at strengthening the resilience and capacity of the financial system to withstand adverse events.
What does this IEF tell us?
Los riesgos del escenario internacional se han incrementado y siguen siendo la principal fuente de preocupación para Chile y el mundo.
La economía chilena ha avanzado en resolver los desequilibrios macro, por lo que está en mejor pie para hacer frente a un deterioro del escenario global.
La banca local cuenta con capital suficiente para enfrentar escenarios de tensión severos.
El aumento de los riesgos externos reafirma la necesidad de continuar fortaleciendo la resiliencia y capacidad del sistema financiero para amortiguar eventos adversos.
Los riesgos del escenario internacional se han incrementado y siguen siendo la principal fuente de preocupación para Chile y el mundo.
- La reaceleración de la economía en EE. UU., y sus efectos en la inflación, han elevado las tasas de corto plazo en ese país.
- Las dudas sobre las perspectivas de la política fiscal en EE. UU. y un reacomodo del balance de ahorro e inversión de más largo plazo a nivel global han elevado las tasas largas.
- Sumado a un contexto geopolítico complejo, implica que las perspectivas para la economía mundial siguen siendo la principal fuente de riesgos.
La economía chilena ha avanzado en resolver los desequilibrios macro, por lo que está en mejor pie para hacer frente a un deterioro del escenario global.
- La política monetaria ha logrado ir reduciendo la inflación.
- Se suma una caída en el endeudamiento de las empresas y una mejora en indicadores de quienes usan crédito.
- Sin embargo, hay grupo de personas y empresas más rezagados en esa mejora de indicadores.
- El costo del crédito comercial y de consumo comenzó a caer en plazos cortos, en los que tiene mayor incidencia las bajas en la tasa de interés producto de una política monetaria menos restrictiva.
La banca local cuenta con capital suficiente para enfrentar escenarios de tensión severos.
- Al igual que los demás segmentos de la economía, la banca debe seguir fortaleciendo sus capacidades de manera precautoria. Para enfrentar eventuales shocks negativos y el vencimiento de políticas de apoyo usadas en pandemia.
El aumento de los riesgos externos reafirma la necesidad de continuar fortaleciendo la resiliencia y capacidad del sistema financiero para amortiguar eventos adversos.
- En un escenario donde se intensifiquen altas tasas de interés de largo plazo, y el ajuste monetario se prolongue por más tiempo en las economías desarrolladas, las condiciones financieras para emergentes se mantendrán estrechas.
- Un deterioro de las condiciones financieras externas representa el principal riesgo para usuarios y oferentes de crédito locales.
Presentations
Informe de Estabilidad Financiera Segundo Semestre 2023 - Rosanna Costa, Presidenta
Conferencia de Prensa:Informe de Estabilidad Financiera Segundo Semestre 2023
- Presentación Rosanna Costa. Comisión de Hacienda del Honorable Senado de la República
- Presentación Rosanna Costa. Asociación de Bancos e Instituciones Financieras (ABIF).
- Informe de Estabilidad Financiera Segundo Semestre 2023. Rosario Celedón
- Presentación de Rosanna Costa. Asociación de Bancos e Instituciones Financieras (ABIF)
- Presentación de Alberto Naudon. Asociación de Industriales de Iquique
- Presentación de Pablo García. Credicorp
- Presentación de Alberto Naudon. en Banchile
- Presentación de Pablo García. Renta 4
- Presentación de Pablo García. Chile Investment Forum