Answering this question will require an extensive period over which to analyse job creation and destruction dynamics. In any event, some studies for other countries that have previously enacted similar reforms suggest that they have had a certain cost in terms of lower net job creation. Also, insofar as the labour market reform has been conducive to contractual stability in temporary employment agencies, the type of professional development of those workers who start their career at such agencies will need to be analysed. Another issue that will need to be determined is whether the reform prompts an increase or decrease in labour turnover and, therefore, its impact on the accumulation of human capital by workers and their working lives. Furthermore, labour market regulation can also affect the type of jobs available and, in sum, the type and productivity of the firms that are created. In particular, some of the literature suggests that greater constraints on temporary contracts increase business productivity, but at the cost of higher unemployment. All of these overwhelmingly relevant questions should be subject to rigorous analysis in the years ahead. Having a diagnosis on these issues is essential to recalibrating the characteristics of contracts, should it be necessary.17 The labour market reform has also brought about changes in collective bargaining.
•  As we have discussed in our publications, such as our Monetary Policy Report, the current events will have dramatic effects on financial and economic activity. A contraction in the economy and a rise in unemployment are expected. •  Financial institutions and the banking sector are exposed to the shocks in liquidity and credit risk. At the same time, the banking sector is an important pillar channeling liquidity and credit support to firms and households. •  The CBC has been providing liquidity facilities to the markets since the Covid-19 first hit our country. •  Nevertheless, we have also stated that although this crisis will last longer than we originally expected, it is a temporary crisis. Moreover, the banking sector is in good shape and solvent to weather the storm. •  When crises hit our countries, systems like CLS acquire one of their most important roles. It is during these times that counterparty, and credit risks increase and a system that allows payments without any settlement risk is of extreme value for financial markets and the economy. Page 3 of 4  Central Bank of Chile July 2020  •  This crisis has created an important challenge to policymakers everywhere. In many countries, we hear that an extraordinary crisis should generate extraordinary responses. In Chile, we have indeed produced such extraordinary responses, both in size and shape.