Slide 22  FinTech enablers in Chile ▪  Last year, a bill was passed allowing for the issuance of prepaid cards by non-bank institutions o o o  The Law establishes integrity requirements for these issuers Restrictions on how the funds can be used Requires the Central Bank to issue regulations with the prudential requirements  ▪ The Central Bank took the opportunity to undertake a full revision of its retail payments regulation ▪ The new regulations not only set the prudential requirements o o  ▪  Narrows down the scope of regulated entities dealing with the processing of transactions Changes their capital requirements  These features give some ground for optimism on the potential contribution of FinTech not only to the democratization of financial services but also to price and financial stability and development in Chile  [SLIDE 22] These same factors have provided the basis for the most important step in the development of electronic retail payment services. Last year, a bill was passed allowing for the issuance of prepaid cards by non-bank institutions. Its objective is to foster financial inclusion and competition. Given the sensitive nature of deposit-taking, the Law establishes integrity requirements for these issuers, restrictions on how the funds can be used, and requires the Central Bank to issue regulations with the prudential requirements for this industry. 17  Central Bank of Chile 29 June, 2017  The Central Bank used this opportunity to undertake a full revision of its retail payments regulation.
Slide 19  Chile’s financial market at a glance Chile’s financial market  Total debt of non-bank loans (*)  (percent of GPD; ratio; percent)  (percent of GPD) 140  2013  2014  2015  2016  120  Total Assets/GDP  112  119  123  122  100  NPL (%)  2.0  2.0  1.8  1.8  Loans/GDP  83  85  88  88  Loan/Total Deposits  1.3  1.3  1.3  1.3  ROE (%)  15.0  17.3  14.4  11.1  40  ROA (%)  1.2  1.4  1.1  1.0  20  CAR (%)  13.3  13.4  12.6  13.8  0  Local bonds Factoring, leasing and others External loans and trade credit  Local bank loans External bonds Debt related to FDI  80 60  09  10  11  12  13  14  15  16  (*) Based on firm-level data, expect for factoring, leasing, and other securitized bonds; and commercial paper. Source: Bank of International Settlements, Central Bank of Chile, and SBIF.