Evaluations Commissioned by the Central Bank of Chile to Independent External Experts

 

This page contains all the assessments on specific topics commissioned by the Central Bank of Chile to independent external experts. The relevant information for each evaluation is displayed below. For any additional information request, please fill the form in the “Contact” section.

 

Between February and April of 2021, the CBC voluntarily submitted to the pilot of the International Monetary Fund Central Bank Transparency Code (CBT), which was adopted in June 2020. The broad purpose of the CBT is to help central banks assess their own transparency practices, which are measured in five core areas or “pillars”, including central bank governance, policies, operations, outcome, and official relations. In response, the CBC developed a detailed roadmap to address the recommendations contained in the IMF report and thus strengthen its transparency.
 

 

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In September 2018, the Board of the Central Bank of Chile (CBC) commissioned the Independent Evaluation Panel (the “Panel”) an assessment of compliance with the legal objectives of the CBC enshrined in its 1989 Organic Constitutional Law, including price stability and financial stability. The Panel was consulted to review the independence of the Central Bank, the influence and impact of its policy actions, the adequacy of its policy framework, and policy tools to achieve its objectives of price and financial stability, the effectiveness of its organization, procedures, and policy tools for these objectives, and the quality of their communications. In all these areas, the Panel was also invited to make recommendations. The Panel formulates a set of 40 recommendations, of which 24 refer to monetary policy, 13 to financial policy, and 3 to general corporate issues.

 

 

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This is the assessment report of Dale Gray (International Monetary Fund, IMF) on the Financial Stability Report (FSR) of the Central Bank of Chile (CBC). The evaluated topics are described in Annex 1 of the document. Dale Gray visited the CBC between May 15 and 18, 2017 under a full program of meetings with managers and staff of the Financial Policy Division, the Governor of the CBC, and Board members, bankers and other readers of the FSR, officials of the Ministry of Finance, and others. The CBC is found to produce an excellent FSR. The recent IMF working document WP/17/73 examined and classified 19 FSR in Latin America and the Caribbean. Chile’s FSR ranked first among 19 countries. Readers of the FSR praise its solid content, useful trends in national and international markets, extensive coverage, useful data on the financial sector, credit users, debt trends, developments in the real estate sector, etc. The IMF team that wrote document WP/17/73 classified and rated Chile’s FSR as described in Annex 2 of the document.

 

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Mr Carl Andreas Claussen (Sveriges Riksbank) was asked to review the system of decision-making and communication of monetary policy of the Central Bank of Chile (CBC). The (new) system is found to be in line with the practice of leading inflation-targeting central banks. The changes that will be introduced from 2018 are well received and, in general, well chosen, although there is still space for improvement. The most obvious improvement would be to publish the trajectory of the policy rate that supports the projections of the CBC. However, before that, and before other changes, the CBC Board should make an explicit decision on how it wishes to conduct policy analysis and decision-making. Only in this way, then, can the CBC make the best decisions regarding communication and transparency. [The views expressed in this document are solely those of the author and should not be construed as reflecting the views of the staff of the Sveriges Riksbank or its Executive Board.
 


 

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At the request of the Central Bank of Chile (CBC), a Technical Assistance Mission of the International Monetary Fund (the “Mission”) visited the CBC to assess and advise on models and related processes used as support for the policy of the CBC on inflation-forecast targeting. The Mission met with Governor Mario Marcel and Board members Rosanna Costa, Pablo García, Alberto Naudon, and Joaquín Vial. The Chief Economist (I) and Head of Macroeconomic Analysis (GAM) Miguel Fuentes, coordinated the contributions of the CBC. The Head of the Medium-Term Forecasting Department Jorge Fornero was the main information provider and daily labor collaborator. For three weeks, and before the full work began, a member of the Mission observed the preparation of the March 2016 projections and their presentation to the Board (the equivalent to the Monetary Policy Committee of other central banks). He also observed during the Monetary Policy Meeting the policy decision of March 2016. The Mission made presentations to the staff of the CBC on the preparation of forecasts by the CBC and the Czech National Bank (CNB), on predictive accuracy (of the CBC in comparison with Consensus Economics survey, CNB and the Bank of Canada), on techniques of combining the predictive results of different models, and on core inflation. This report presents the Mission’s evaluation and the main conclusions. [This report is subject to the Staff Operational Guidelines for International Monetary Fund Staff on Dissemination of Technical Assistance Information].

 

 

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For many years, Chile has had two labor market surveys for the Greater Santiago area. One of them is the one carried out by the University of Chile since the 1950s; the other is the one applied by the National Institute of Statistics (INE) at the national level, which also has data for the Metropolitan Region. The results of both, especially the unemployment rate, do not always coincide, a situation that has occurred in particular in every year since 1998. This study analyzes this divergence between the two surveys, identifies several areas that could explain it, and recommends some actions to improve their operation. The study found that both surveys adequately comply with the recommendations of the International Labor Organization when it comes to measuring employment and unemployment.

Two significant areas of the report refer to questionnaires used in surveys, and data estimation techniques. Fourteen recommendations are presented to improve the surveys, with particular attention to the INE’s plans to completely renew its questionnaire at an early date. With respect to the survey of the University of Chile, modifications to the basic questionnaire and procedures for weighting the data are proposed. At the same time, it is recommended to improve the information analysis (INE), maintain error profiles in data collection (both surveys), and adjust the statistical analysis for seasonality (both surveys).
 

 

 

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