Chile’s banking sector is highly integrated with the global economy
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Chile’s banking sector is one of the most developed and competitive in Latin America. It is deep, solvent and highly integrated with the global economy. Despite more subdued economic growth since 2014, provoked mainly by a drop in international metal prices that widened the fiscal deficit, and coupled with a highly volatile exchange rate, the sector continued to grow with the value of outstanding deposits and loans rising by 3.3% and 5.3% y/y, respectively, in 2016. This pace of growth, however, weakened from compound annual growth rates (CAGR) of 11.7% and 12.7% during 2011–2015. Still, indicators for portfolio quality, solvency, liquidity and profitability remained stable in 2016 and the first ten months of 2017, favoured by the more doveish stance adopted by the Central Bank of Chile and the conservative regulatory policy of the Superintendence of Banks and Financial Institutions (SBIF).