advanced and emerging countries. in this context, a resurgence of capital inflows to emerging economies is a possibility. domestically, one risk that cannot be ruled out are stronger effects from the higher external uncertainty, hitting harder the local financial markets, confidence, and consumption and investment decisions. notwithstanding the capacity of economic policies to mitigate the effects of a more adverse external environment, it is important for the private sector to properly administer financial risks. worth noting are the favorable financial indicators of the corporate sector ( figure 10 ). in addition, currency mismatches continue to be stable and bounded, despite the increasing role of external debt as a source of funding. still, it must be pointed out that financial intermediaries would be wise to keep a watchful eye on credit risk, considering its negative effects on external demand implied in the risk scenarios. bis central bankers ’ speeches as for households, on average the financial situation has not deteriorated. the recent increase in private consumption has evolved hand in hand with labor income. the evidence suggests that, so far, borrowing has not risen above its long - term trend, and the average debt - to - income and debt - to - financial burden ratios are stable. along the same line, households ’ past - due portfolio indicators have tended to stabilize in relatively low levels during the past year ( figure 11 ). in the present scenario, however, we need to continue to closely monitor the evolution of household debt. if it continues to grow at the current pace, it is possible that households ’ debt and financial burden will increase significantly in the face of a more severe risk scenario. finally, and considering the deterioration of the financial indicators of the lowerincome households in the period 2007 – 2009, they could find themselves in a situation of greater financial vulnerability. although the volume of debt of these households is fairly limited, it could prove substantial for some credit providers focusing on lower - income segments. problems in international financial markets have caused a widespread rise in the banks ’ external financial cost. meanwhile, no reduction in volume or maturity of external credit for this sector is observed. ( figure 12 ). the banking system has maintained a looser liquidity position since late 2008 – thanks to increases in longer - term liabilities and greater liquid assets. as stated in our financial stability report, our banking system has the capital levels needed to absorb the materialization of a severe risk scenario. the stress tests show that the current levels of capitalization of the banking industry would permit it to absorb

bonds with over 9 - year duration, except for bbb bonds, which considers more than 8 - year duration. sources : central bank of chile and lva indices. figure 4 stock - index volatility ( * ) ( annualized percentage ) hungary july - december 2011 france germany spain russia brazil s. korea chile turkey mexico australia hong kong u. k. u. s. a. taiwan india colombia n. zealand philippines china peru january - june 2011 ( * ) calculated with daily return of stock indexes, base 100 = 2010. data at 16 december. fuentes : banco central de chile a base de informacion de bloomberg. bis central bankers ’ speeches figure 5 retail sales and new car sales emploment and unemployment rate ( index, centered on mean of period ( 1 ) ( index, 2003 = 100 ) 1990 - 2010 ) 300 20 150 - 10 - 20 - 30 - 40 90 93 96 99 02 05 08 11 06 07 08 09 10 11 non - durables new cars employment unemployment durables ( 1 ) sold in moving quarter. ( 2 ) seasonally - adjusted series. sources : chile's national automobile association, central bank of chile, chile's national chamber of commerce, and ricaurte, m ( 2011 ), “ indicadores de mercado laboral para la comparacion de las crisis asiatica y financiera internacional, ” preliminary document, central bank of chile, june. figure 6 inflation indicators incidences on monthly inflation ( * ) ( annual change, percent ) ( percentage points ) 0. 8 0. 8 0. 6 0. 6 0. 4 0. 4 0. 2 0. 2 0. 0 0. 0 - 0. 2 - 0. 2 - 2 - 2 - 0. 4 - 0. 4 - 4 - 4 06 07 cpi cpi minus foodstuffs and energy apr. jul. oct. fresh fruits & vegetables ( 2. 90 % ) fuels ( 5. 70 % ) foodstuffs x1 ( 17. 77 % ) cpi meats ( 3. 55 % ) ( * ) in parentheses, shares in cpi basket. sources : central bank of chile and national statistics institute ( ine ). bis central bankers ’ speeches table 1 international baseline scenario assumptions 2010 ( e ) 2011 ( f ) 2012 ( f ) 2013 ( f ) sep. dec. sep. dec. sep. dec. 2011 2011 2011 2011 2011 2011 report report report report report report