View
220
Download
0
Category
Tags:
Preview:
Citation preview
CHILEAN FINANCIAL MARKETS AND INSTITUTIONS
Whitney Casey
Leigh Barter
Sarah Kate Cameron
Adam Middleton
FOUNDING OF CENTRAL BANK OF CHILE
President Arturo Alessandri Palma initiated a series of projects to bolster Chile’s economy
Princeton professor Edwin Kemmerer aided Palma in establishing the role and structure of the Bank
Opened January 11, 1926
ORIGINAL STRUCTURE
Governor and Vice Governor Board of Directors
Elected by President of the Republic, Chilean commercial banks, foreign banks, representative associations, and the shareholding public
Autonomous from the government by supervised by Superintendent of Banks
DEVELOPMENT
2nd bank law: empowered the Central Bank to grant credits to the State and other state bodies
3rd bank law: expanded the Bank’s powers in terms of controlling credit and setting reserve requirements
4th bank law: created a Monetary Council and gave the Bank authority to set more expansive monetary policies
CHILEAN FINANCIAL INSTITUTIONS:THE CENTRAL BANK OF CHILE
The Current Structure Autonomy Flexible Horizontal Organization
General Manager General Counsel General Auditor
THE FUNCTIONS OF THE CENTRAL BANK OF CHILE
Emission Regulation of the
amount of money in circulation and credit
Regulation of the financial system and the capital market
Faculties to ensure the stability of the finance system
Bank functions as fiscal agent
Attributes in international issues
Faculties in terms of foreign exchange operations
Statistical functions
THE CENTRAL BANK OF CHILE ORGANIZATION AND
FRAMEWORK
The Board Conclusion
Why the need for an autonomous central bank?
FOUNDING OF SANTIAGO STOCK EXCHANGE
Founded November 27, 1893 Many of the original members were mining
companies
DEVELOPMENT
Crashed with the rest of the world during the Great Depression in the 1930s
Persisted in decline under oppressive government rule until 1973
In 1973, Marxist president Salvadore Allende was assassinated and a movement toward economic reform began
MOVEMENT TOWARDS FREE ENTERPRISE
The movement toward free enterprise which began with Allende’s assassination encouraged: Economic liberalization Decentralization External trade Respect for private property
This movement encouraged capitalism and pulled the stock exchange out of recession
RECENT HISTORY
Since 1973, Chile has experienced substantial growth
Chilean companies began trading internationally through the use of ADRs
New challenges Keeping pace with technology Attracting new investors Developing the depth of securities traded
INVESTING IN CHILE
Chile has a very secure and attractive market for investors
Open Economy solid institutional framework macroeconomic stability credible policymaking
INVESTMENT POLICY
Does not differentiate between local and foreign investors
Increase of Foreign Direct Investment Many foreign companies have established a
base in Chile bilateral investment-protection double-taxation treaties
FOREIGN DIRECT INVESTMENT
Major impact on Chile’s economic expansion Over 3,000 companies from 62 countries
held direct investments United States 24.2% Spain 20.8% Canada 18.5% United Kingdom 8.3%
Different Sectors mining $23.5 billion utilities $14.4 billion financial services $6.69 billion telecommunications $6.9 billion
MARKET CONDITIONS
Most stable economy in Latin America monetary policies of Banco Central de Chile fiscal policies of the Ministry of Finance
Two Sectors Service-based 51% Industry-based 35.5% Agriculture 5.5%
IMPORTS
2009 U.S. Dollar Amount = 39.75 billion Commodities
Petroleum and Petroleum Products Chemicals Electrical and Telecommunications Equipment Industrial Machinery Vehicles Natural Gas Etc.
EXPORTS
2009 U.S. Dollar Amount = 53.74 billion Commodities
Copper Fruit Fish Products Paper and Pulp Chemicals Wine Etc.
CHILE’S MAIN TRADING PARTNERS
Import Export
Trading Partners
0%
5%
10%
15%
20%
25%
ChinaU.S.JapanSouth KoreaBrazilMexico
Trading Partners
0%
5%
10%
15%
20%
25%
U.S.ChinaAr-gentinaBrazilSouth Korea
Recommended