Chile said Thursday it was planning regulatory changes to strengthen its banking system, including working with all banks to ensure compliance with the Basel III set of global banking regulations. "We want to propose a law in Congress that basically modernizes our banking system," Finance Minister Rodrigo Valdes said in a presentation to investors in London. Chilean banks are considered among the most solid in Latin America, but current regulations date from 1986. Amongst the key aspects of the reform is a plan to give all Chilean banks six years to fully implement Basel III.
The Basel III rules, which are aimed at making the global banking system more resilient following the 2008 financial crisis, include forcing banks to hold more and different types of capital to insulate themselves during downturns. "Many of the banks in Chile are already in Basel III, the biggest, international ones moved to it some time ago. There are a few banks, including (state bank) BancoEstado, which unfortunately do not have the relevant capital increases," said Valdes. Under the reform to Chile's general banking law, Tier 1, or core, capital requirements would rise to at least 6.0 percent from the current 4.5 percent, the economy ministry said.
Comments
Comments are closed.