The Current Debate Over Changes in Chile’s Bank Act

Abstract

This chapter examines the basis of the present institutional structure of banking supervision in Chile and the proposed changes to the General Banking Act, which are intended to respond to current trends in the international financial scene—mainly the processes of globalization and internationalization of the financial system. The 1996 amendments to the law—while consistent with the regulatory structure now in effect—incorporate incentives for self-regulation and for strengthening solvency. They are also designed to enhance an integrated system of supervision that is carried out by the authorities as well as private parties. The aim is to ensure that the expansion of domestic and international banking activities is achieved along with the establishment of adequate mechanisms for monitoring risk.