During the Money and Banking Conference organized by the BCRA, Vittorio Corbo, Governor of the Central Bank of Chile, stressed the sequential process undergone by the Chilean economy following the crisis of the early 1980s. Four elements have been of utmost importance in this long process: consolidating fiscal solvency as a countercyclical tool, reestablishing external sustainability, restructuring liabilities, and rebuilding the financial system.
And in tandem with a suitable resolution regime it could reduce the strain on national budgets caused by the restructuring of banks. Unlike a national authority, a European supervisory body has no incentive to act out of a false sense of consideration for “its” banks.