As part of this process, in 2021 and in accordance with the definitions of the General Banking Law, a policy framework was published by the Central Bank to implement the Countercyclical Capital Requirement. The CCyB is the main macroprudential policy tool under BCCh authority, and BCCh-CMF coordination. As applied, the objective of this bank capital requirement is to increase banks’ resilience in the face of severe stress scenarios, resulting from systemic risks, thus contributing to reduce the impact of these events on financial stability, avoiding restricting essential banking services, such as credit supply, hence protecting the economy. The BCCh has so far not activated this requirement. As indicated in our latest Financial Stability Report, the banking system shows resilience, with contained risks and high levels of provisions, liquidity and capital that constitute sufficient buffers to withstand severe stress scenarios. Moving forward, it is necessary to advance in the coordination processes between the Central Bank, the CMF, and the Financial Stability Council to consolidate over time the implementation of these new tools within a framework of macroprudential regulation that follows international guidelines. 14  As we continue to observe the experience of jurisdictions that started the implementation of Basel standards before we did, we believe that the challenging last 3 years will provide extremely valuable information regarding the effectiveness of capital and liquidity measures implemented by Basel III and international standards.
In our latest Financial Stability Report and Monetary Policy Report we conveyed clear messages, as to the need to prioritize initiatives that contribute to strengthening the functioning of the financial system and avoid those that could harm it. The Chilean economy is in the process of resolving macroeconomic imbalances and has the task of repairing the buffers that have allowed it to mitigate the impacts of external shocks in the past. For this reason, it is particularly important to prioritize those aimed at promoting savings, strengthening the resilience of financial systems, promoting innovation and financial inclusion. A properly regulated financial system contributes to financial stability and inclusion and is also critical to support economic development and the population’s well-being. 17