In this respect, the Chilean financial system shows better performance than other Latin American and Emerging economies, in dimensions like market capitalization, number of branches per inhabitant, use of derivatives, and participation in domestic credit to the private sector, to name a few. Nonetheless, increased development and complexity of financial markets also means that risks may be higher, and that a stronger and more sophisticated regulatory framework is required. The New General Banking Law and future challenges The New General Banking Law, takes important steps in this direction, by embracing the recommendations of Basel III on banking capital and reserve requirements, as well as on corporate governance. Supervision is also improved under the new law, by merging SBIF into the new Financial Markets Commission (CMF) in order to have a system-wide oversight of risks and vulnerabilities in financial markets. Through the day, the different panels will discuss the role of macro prudential policies and the implementation challenges in adopting Basel III standards. The main goal of these standards is to increase the resilience of the banking sector, by increasing quantity and quality of capital requirements. This framework combines bank-specific measures with macro prudential actions to contain potential systemic risk. In this respect, one of the new tools is the countercyclical capital buffer: an additional capital requirement that could be activated and deactivated by the Central Bank depending on the state of the financial cycle, and whose main goal is to preclude the incubation of systemic risks and increase the resilience of the system as a whole.
According to this principle, monetary policy decisions taken in a centralised fashion by the Governing Council of the ECB are implemented in a decentralised way by the national central banks. Contrary to the US, the use of modern technology and communications has made it possible for market operations not to be concentrated at a single geographical location, but to be carried out simultaneously at all of the National Central Banks. The same type of arrangement applies in other monetary areas (cash management, payment systems, etc.). The efficiency of such a decentralised scheme has been demonstrated in August and September when the inter-bank money market has gone through marked turbulences. The close relationship of national central banks with their banking system has allowed better understanding and addressing their refinancing needs. The Eurosystem benefits from an efficient operational framework The operational framework is based on two main guidelines: -  a range of monetary policy instruments selected in accordance with the principles of an open market economy, a level playing field, simplicity and transparency: these instruments enable the smooth adjustment of banking liquidity and effective steering of short-term interest rates. I should add that the Eurosystem accepts a wide range of collateral, including private securities, to carry out its open market operations.