This issue examines the same external risk scenarios I just described. From the financial stability standpoint, we conclude that the risks coming from the U.S. and the Eurozone have subsided, shifting the focus to the Chinese economy as the primary source of risk. The Report also stresses that if these scenarios come true they may have consequences in Chile, given the domestic economic slowdown. Locally, corporate indebtedness has increased in GDP terms. Companies reporting to the Superintendence of Securities and Insurance (SVS) are posting relatively high debt levels by historic standards and profitability is shrinking. Although these tendencies are consistent with corporate patterns observed in other economies, they do signal a reduction in the sector’s resilience to possible sharp adjustments in the economy’s dynamic. Finally, in the past year, the figures of banking commercial credit repayment have deteriorated somewhat in some of the more pro-cyclical sectors, but on aggregate they are still on the favorable side. 4  BIS central bankers’ speeches  The real-estate market dynamic has not changed much from earlier IEFs. New home sales are still strong and inventories are low. In this context, various indicators show that housing prices continued to rise in 2013 (figure 9). Although the upward trend is generalized across geographic zones, some are increasing faster than others (figure 10). The office space market has increased the vacancy rate, and is expected to increase further as new projects enter the market.
One consistent source of strength for the city has been immigration. Over this period, New York City benefited from a sizable influx of immigrants, which more than offset out-migration in many neighborhoods. To illustrate this, let’s take a look at one such neighborhood in Brooklyn, Sunset Park, that was losing residents to the suburbs in the 1960s and 1970s. As property values fell, new migrants from Puerto Rico, the Dominican Republic and Central America moved in. By 1990, Hispanics comprised about half of all Sunset Park residents. These new residents developed a thriving community, which boosted property values. There was also an influx of Chinese residents, and part of Sunset Park has come to be known as Brooklyn’s Chinatown. There are many other examples where immigrants revitalized whole neighborhoods: Russian and Ukrainian immigrants in Brighton Beach; Chinese and Korean immigrants in Flushing; and Indian immigrants in Jackson Heights, just to name a few. So, has it been all good news for New York City in recent years? Certainly not. Many challenges remain. One by-product of a strong economy and real estate market has been a decline in housing affordability, and an increase in homelessness. It is estimated that there are over 60,000 homeless people in New York City today—almost double the number from 10 years ago and more than four times as high as in the early 1980s. Moreover, poverty rates remain high in many parts of the city, and the education system can certainly be improved.