Chile plans to modernize banking system by adopting Basel III

SANTIAGO – The Chilean government on Monday moved to Congress a bill that aims to modernize the country’s banking system by adopting strict international bank capital requirements known as Basel III.

The bill seeks to gradually implement Basel III rules, which were designed to avoid a repetition of the 2008 financial crisis and which demand that banks have sufficient capital to finance their business and reduce risk.

Retail banks operating in Chile include Santander Chile, Banco de Chile, Itau Corpbanca and BBVA.

“Adopting these standards in Chile is essential to ensure our continued financial integration with the rest of the world,” the central bank said in a statement welcoming the initiative.

The bill will also replace Chile’s existing Banking Supervisor with a new, more powerful Financial Markets Commission.