Central Bank of Chile sets first counter-cyclical buffer
BCC also warns government could face financing problems
The board of the Central Bank of Chile (BCC) imposed a counter-cyclical capital buffer (CCyB) for the first time at its May 23 financial stability meeting.
The five-member board unanimously backed the move, which requires banks to set aside the equivalent of 0.5% of risk-weighted assets within a year. Chile amended its banking law to include a CCyB provision in 2019.
The board said it imposed the buffer requirement partly because of “the deterioration of financial conditions since late last
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