In the midst of a historic increase in interest rates, the Central Bank of Chile (BCCh) reported that its first Financial Policy Meeting (RPF) will be held between May 16 and 17.
The RPF is the semi-annual instance in which the Board of the BCCh decides on the application of the countercyclical capital requirement. This corresponds to a capital charge to the banking system of a macroprudential nature and is inserted within the framework of the new Basel III standards. Its objective is to increase the resilience of banks in the face of potential severe stress scenarios. In doing so, it contributes to reducing the impact these events would have on financial stability, thus protecting the economy as a whole.
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According to the issuer, in case of activation, it will set its level between 0 and 2.5% of the risk-weighted assets, in addition to the implementation period. In the decision process, the BCCh Council will have quantitative, qualitative and judgment elements.
And once the BCCh decides to modify the requirement, the definition of the level and the term must have a favorable prior report from the Commission for the Financial Market.
The statement with the decision and the background corresponding to this announced RPF will be published on May 17, through the usual channels of the entity.
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