calani. page 1 of 5 central bank of chile march 2019 to 0 % in the fourth quarter, and to minus 14 % in 1982. that same year, unemployment reached a record of 25 %, and businesses all over the country were seriously hampered, ultimately affecting their payment compliance. banking profitability went quickly to negative territory and the delinquency rate quadrupled to 15 % of the total portfolio, putting several banks solvency and operations at risk. several factors contributed to the deterioration of the macroeconomic environment in 1982. external interest rates rose, the availability of external credit decreased, and terms of trade worsened in the wake of the escalation of oil prices. this put enormous pressure on the chilean peso — which had been under a fixed exchange rate scheme since 1979 —. this regime broke down dramatically and spread to almost all business sectors, given large fx exposures, and heavily leveraged financial conglomerates. all these factors interacted with one another to become an outright banking crisis. but, whatever the causes of the crisis, unsustainable debt was mostly explained by internal vulnerabilities : inappropriate regulation, weak supervision, and lack of attention to excessive credit growth, leveraged on a fixed exchange rate scheme. although the first aid took the form of “ emergency loans ” by the central bank to commercial banks, during the following year conditions deteriorated rapidly enough to lead to the intervention of 11 banking institutions. another 8 were added in 1983, including the two largest banks in the system. in all, the intervened institutions represented 60 % of total credit. all directors and executives of these institutions were, removed from their posts, and replaced by provisional administrators. measures to fight the crisis aimed at the liquidation of non - viable banking entities, improvement of balance sheets of viable entities through the purchase of deteriorated portfolios, and the reduction of financial burden of bank borrowers through debt reprogramming and preferential exchange rates. in 1985, this extended to the recapitalization of the intervened banks, through the so - called “ popular capitalism ” program. perhaps the most important program was the purchase of deteriorated portfolios by the central bank under a variety of schemes, including repurchase agreements, and in exchange of debt instruments, liquid resources, and a new liability called “ subordinated obligation ”. the impact of these programs on the assets side of the central bank balance sheet was huge, and so were the costs of the complete rescue plan. altogether, it is estimated that

hu xiaolian : law on real rights of the people ’ s republic of china speech by ms hu xiaolian, deputy governor of the people ’ s bank of china, at the symposium on judicial interpretation of law on real rights, beijing, 27 may 2010. * * * i am delighted to attend the symposium on judicial interpretation of the law on real rights of the people ’ s republic of china organized by the supreme people ’ s court and the people ’ s bank of china with the support of international finance corporation. we have gathered here today to discuss the experiences of reforming the legal system on security interest, security interests in personal property and innovative practices on warranty of titles, so as to promote the drafting of judicial interpretation of the law on real rights part four on security interest. secured credit accounted for more than 80 percent of china ’ s aggregate credit. therefore, reform and innovation of legal framework concerning security interest is an important part of financial infrastructure. security interest in personal property is one of the most frequently discussed area in property law system and it is closely related to economic development and restructuring. based on the four pillars of an ideal framework of security interest in personal property, namely wide range of eligible collateral, a centralized registration and public display system, well - defined rule of priority and streamlined process for implementation, the pbc put forward 8 proposals, i. e. making account receivables and inventory eligible collaterals, establishing a floating charge system, protecting bona fide purchase, expanding party autonomy, defining the rule of priority in a clear - cut manner, designating the institution for the registration of account receivables, defining the principles for the registration of floating charge and rules for the registration and charging of security interest, which have already been written into the law on real rights enacted on march 16, 2007. the launch of the law on real rights is of great significance to the development of the credit market, prevention and mitigation of financial risks and easing the financing difficulties of smes. sme financing is a worldwide challenge, and it is more difficult in developing countries. out of multiple problems such as large smes ’ exposure to operational risks and lack of financial transparency and banks ’ difficulties in managing lending to smes, the lack of legitimate collateral is the real bottleneck. approximately 70 percent of the credit collateral received by commercial banks in china is real estate, while more than 70 percent of the assets of smes are account receivables and inventory. it was estimated