- In addition, the development of pension funds, mutual funds, and insurance companies, provided support for banks’ funding needs, and help to develop the FX derivative market that has allowed both, banks and corporations to deal with currency exposure without the need of imposing currency-based measures as we have observed in other emerging economies (this includes regulations imposing a different treatment between domestic and FX-denominated operations by banks, such as reserve requirements on FX denominated banks’ deposits). - Because of this, over the past decades, and despite global financial turmoil and crises, the size of the Chilean-banking system has increased steadily to reach levels similar to developed economies. c. Which policy actions could ensure the stability of unregulated corners of the financial system without affecting negatively global financial integration? - Coordination between regulators and supervisors. - A legal framework that help to avoid fragmentation and the existence of blind spots. - Policy actions towards high quality data on a comprehensive registry of household credit and debt. - Prospective analysis of emerging risks in the traditional banking system that take into account indirect exposures to the non-banking system. - Adapt and/or develop methodologies and models to assess the spillover effect of non-bank lenders in times of stress, as well as considering them in traditional stress test assessments.   Some context on OECD support to the use of CBM:  A recent OECD document (De Crescenzio et al., 2015) emphasizes that mainly countries facing the “original sin” use CBM. Chile is one of them.

An efficient securities clearing and settlement infrastructure is of fundamental importance to the integration and smooth functioning of financial markets. To this end, the Eurosystem supports the Commission’s intention to put forward a proposal for a directive on securities clearing and settlement. On the question of new regulatory initiatives, we share the view that asset management and retail financial services are areas where regulatory intervention could be considered. In the area of financial supervision, the Eurosystem fully supports the Commission’s view that the current institutional set-up should be exploited to the maximum extent before any potential structural change is considered. In particular, the Eurosystem agrees that the main policy objective in the area of financial supervision is two-fold: first, to enhance the competitiveness of EU financial markets and institutions and to facilitate the development of cross-border finance both in terms of institutions and in terms of products and services – the so-called financial integration angle; and second, to ensure the effectiveness of standards for oversight and supervision in a more integrated financial system – the so-called financial stability angle. In this respect, we attach particular importance to the consistent implementation of financial services legislation and the pursuit of supervisory convergence, as well as to the effective cooperation between home and host authorities. We are of the view that it is important that home-host coordination be developed on a robust and consistent basis for the financial groups involved in a way that both ensures effective supervision and reduces compliance costs.