Chile needs to implement well- designed and coherent macro-prudential policies as part of “adjustments” to its financial oversight and regulatory framework, central banker Enrique Marshall said.
The 2008 and 2009 global financial crisis made clear the importance of establishing macro-prudential policies to preserve financial stability, Marshall, who is one of the central bank’s five board members, said in a presentation posted on the institution’s website today.
Chilean regulations helped the Andean nation weather past crises, even though it’s widely recognized that improvements must be made, Marshall said.
Some “apprehensions” exist that Chilean regulatory tools haven’t been tested to withstand extreme stress, he said. The central bank has started to run stress tests on the banking system that may extend to other industries such as life insurance, Marshall said.
“Chile’s central bank must play a leading role in the implementation of macro-prudential policies,” he said. The bank also “must gain a greater role in defining prudential regulations, particularly in areas related to capital requirements and provisions,” he said.
Marshall today is participating in a meeting of economists, policy makers and officials from the International Monetary Fund to analyze ways to protect Latin American financial systems. The meeting is in Punta del Este, Uruguay.
Marshall’s comments don’t necessarily reflect those of the bank, according to the presentation.
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