2026/05/20 | Andrés Pérez M., Vittorio Peretti, Andrea Tellechea & Ignacio Martínez
All about global risks. In its 1H26 Financial Stability Report, the BCCh maintains the tightening of financial conditions as the primary risk to domestic financial stability. In this report, the materialization of such a risk could be triggered by the intensification of the ongoing conflict in the Middle East, or its effects on inflation and global growth. The previous report (November 2025) had also flagged an abrupt tightening of financial conditions as the main risk, although sourced from a broader set of geopolitical, trade, fiscal, and institutional factors. In addition, the current Report flags greater vulnerabilities associated to elevated public debt in advanced economies, as well as sudden asset price corrections linked to shifts in expectations on AI, growth, and productivity.
Recent changes in the local financial market could, at the margin, amplify the transmission of external shocks to the Chilean economy. Non-residents have significantly increased their holdings of local currency sovereign debt, diversifying the asset’s investor base, enhancing liquidity, and strengthening the price formation process, while also raising exposure to swings in global risk aversion. Separately, Chilean pension funds maintained an elevated interest rate exposure to the US at longer horizons; recent regulation seeks to mitigate the risks associated to such positioning.
Raising the CCyB up to neutral. The Financial Policy Meeting that preceded the report, the Board unanimously raised the CCyB to the neutral level of 1% of RWAs over a two-year horizon, up from the current 0.5%.
Our take. The Chilean economy seems increasingly well positioned to manage heightened external risks to financial stability.
- The decision to raise the CCyB to the neutral level of 1% of RWA's over a two-year horizon, in the context of persistently weak bank credit dynamics, likely rests on the view of a gradual upswing in the credit cycle. In the BCCh’s view, the credit cycle has been determined by demand factors in line with fundamentals, without evidence that bank capital is limiting credit growth.
- In any case, the BCCh’s decision to raise the CCyB takes place as the Financial Market Regulator (CMF) has announced measures that could reduce capital requirements at the margin, over time.
- We view the decision as part of a broader institutional effort by the BCCh to enhance its ability to weather external shocks, including the ongoing reserve accumulation program, in the context of a balanced economy (closed output gap, anchored medium-term inflation expectations).
- What’s next on data: The CMF will publish April’s bank credit data by the end of the month. The BCCh will publish the Financial Policy Meeting’s minutes on June 3, with a focus on the CCyB policy options and implementation horizons formally discussed by the Board. The BCCh’s 2Q26 Bank Credit Survey is scheduled to be released on July 15. The BCCh’s 2H26 Financial Stability Report will be published on November 17.