necessary as well. assessing trust on a central bank by inserting a question in an opinion survey suffers from the same limitations as with government institutions and a few more. answers to a broad question may be more reflective of prejudice than of attitudes that may shape the response to future policy decisions or incoming information and may come too late in a process of social or market change to make any difference. in addition, page 5 of 8 central bank of chile july 2019 experience with opinion surveys in different countries has shown that no more than half of respondents have some basic knowledge of central banks. adopting a more systematic and rigorous approach to assessing trust in the central bank may not only help address these shortcomings but also to acknowledge the full diversity of its responsibilities. i have already noted research stressing the relevance of credibility for the effectiveness of monetary policy, but credibility and public trust may be equally important for financial stability, the issuing of currency, or the generation of statistics. moreover, one can conceive that trust across these functions could be somewhat connected. loss of trust from a misconceived financial intervention or from distorted statistics may spillover to the way stakeholders assess the credibility of monetary policy. to foster trust, a central bank must go beyond the conduct of monetary policy to focus on how to develop reliability, adaptability, integrity, openness and fairness in its different areas of work. in the context of central banking, reliability is not equivalent to a dovish monetary policy giving priority to shortsighted demands to stimulate the economy, but to do the proper balancing of risks to align monetary policy with long - run social welfare. it means acting in a coherent way, showing thorough decision - making, carefully explaining reasons and arguments behind every action, conducing predictable decisions, and running efficiently the central bank as an organization. for this, i consider essential a clear framework for monetary and financial policy, data - driven decision making, unquestionable technical capacity and statistics, and skillful crisis management. reliability of a central bank, in turn, can be assessed based on the accuracy of its projections, its ability to identify financial risks, the quality of its statistics and the safety of the domestic currency and payment systems. for adaptability, a central bank must develop its analytical skills to identify structural changes in the economy and emerging sources of risk, telling them apart from necessary innovation. to this end, it may need to deepen its knowledge of markets and agents, and to be on top of technological developments.

credit and rolling lines, reflecting tighter conditions in some households. non - compliance indicators have remained relatively stable at low levels for mortgage loans and have risen for consumer loans. in particular, consumer credit write - offs and delayed repayment of retail lending have both increased ( figure 13 ). going forward, a deteriorating labor market would affect the sector, particularly those households with less financial capacity to face an income shock. meanwhile, a scenario of higher rates would have a smaller impact on households'outstanding debts — as they are granted mostly at a fixed rate and long term — as opposed to new borrowing for buying a new home or refurbishing one. all in all, the aggregate impact of this scenario on the sector is greater if the macroeconomic effects of an in interest rate rise are factored in. the banking system's financial indicators remain healthy, although capitalization is lagging behind international standards ( figure 14 ). banking stabilized profitability and solvency indicators, keeping liquid and currency mismatches within bounds, and without making significant changes in its dividend policies. in terms of credit risk, quality has deteriorated in the individual evaluation of the commercial portfolio, which has been covered with increased collateral. although this strategy allows reducing the idiosyncratic risk of each bank individually, it causes vulnerability of the banking industry to systemic events that simultaneously reduce the payment capacity of enterprises and erode collateral value. this is a risk factor that must be monitored considering that 45 % of total bank lending belongs to this category. stress tests indicate that an adverse scenario of a slight but prolonged fall in activity would pose a risk to banks comparable to one of a more severe scenario but with a faster recovery. thus, in the adverse scenario described above, the fraction of banks that maintain their capital adequacy ratio ( car ) above 10 % would represent 57 % of the system's assets. under the severe scenario, the figure would be 50 %. there is a contrast with 2012, when the fraction of banks with cars over 10 % accounted for 85 % of the system's assets in the severe scenario ( figure 15 ). all this points to the need to enhance the sector ’ s resilience via higher capital levels, a situation that has been acknowledged in other jurisdiction. along these lines, the bill that modernizes banking legislation contributes to the strengthening of domestic banks ’ capital requirements. as a matter of fact, one of the main milestones in terms of financial regulation was the sending to congress of the