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BCCh Starts Banks’ Countercyclical Capital Requirement

CHILE
  • Chile’s central bank at its financial policy meeting agreed to activate the countercyclical capital requirement at a level of 0.5% of risk-weighted assets, with a one-year term, according to the following statement: https://www.bcentral.cl/web/banco-central/contenido/-/detalle/reunion-de-politica-financiera-primer-semestre-2023
  • The decision was made unanimously as a preventive measure given greater external uncertainty as risk of severe external shock has increased, though it’s still low, policymakers said. The tool is a “macroprudential requirement” with the objective of increasing the resilience of the economy in the face of severe stress scenarios resulting from systemic risks, according to policymakers.
  • Diario Financiero said lenders may have to raise $1.5 billion.
  • 1030am local time: Central Bank President Rosanna Costa will speak about the financial stability report before a senate committee. At 3pm local, Costa gives a press conference on the report.

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