Mario Marcel: From weakness to strength - the journey of the Chilean financial system and its next steps

Speech by Mr Mario Marcel, Governor of the Central Bank of Chile, at ChileDay, London, 10 September 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The Chilean financial system has changed notably in the past four decades. While in the early 1980s it was at the center of one of the worse economic and social crises in history, now it is a major source of strength, providing resilience to the economy in the face of external shocks. So, how did this happen? What is the source of such resilience? What new challenges lie ahead? That is the purpose of this presentation.

In a nutshell, we can argue that the regulatory changes that followed the crisis set a new framework that, far from preventing financial development facilitated it in a way consistent with economic development. Some key reforms -most notably pension reform-facilitated the emergence of new actors, making the financial sector more diverse, deep and forward-looking.