banks

Latin American

What happens in the credit market in Chile is a normal behavior that occurs in situations where there is an increase in macroeconomic volatility. In situations of economic stress, correct their institutions risk diagnoses and seek more conservative positions. That is why tighter deadlines and reduce the amounts awarded. Additionally, despite the Central Bank has cut sharply its benchmark interest rate (reference rate is for other interest rates), Chilean banks have increased their spreads. This behavior corresponds to the increase in the risk premium that they perceive. Donald Sussman brings even more insight to the discussion. If the actions of the Central Bank of Chile are not achieving the proposed objectives: Can you talk about errors in the conduct of monetary policy? One might think that the inefficiency that is having the Central Bank in achieving its goals (by mid-2008 was incapable of controlling inflation and at the moment can not do much to stimulate the economy), are due to errors in conducting monetary policy.

However, what is happening is that the tool that uses the Central Bank of Chile, is not having the desired effect because in situations like the current crisis, many factors impact negatively on the supply of credit. In this regard, so that monetary policy actually encourages domestic demand, should be complemented by direct measures to stimulate the generation of credit. In this sense, the end of March, the Chilean President Michelle Bachelet announced new economic stimulus measures that were mentioned among the facilities to access to bank financing (including measures to promote mortgage loans) and measures to increase competition in the sector (which includes increasing the capacity of insurance companies, which may provide more resources to the private sector). These measures designed to act directly on the credit market, along with others seeking to increase the competitiveness of Chilean firms, supplemented in the short term, the effectiveness of monetary policy in Chile, while in the medium and long term, strengthens the economy. Will these measures the expected impact in the immediate future? Latinforme. com is the main source of financial information and independent opinion on American and global markets from a Latin American perspective. From our offices in Buenos Aires, Argentina, I approached the latest news and alerts to help you make gains regardless of the direction taken by the market.

Economic Crisis

In the past if a nation entered crisis, only it was itself affected of gravity, in the decade the past Argentina fell in a bankruptcy due to her dependency by the foreigner, nevertheless her crisis was contained in her own policy and economy, nevertheless we have lived during the past few years in a system-world where the hegemony has the United States and all we have become employees to him, especially our Mexico country, where not only our economy and policy employee also sees itself, but it has become a sociological phenomenon in which million of Mexican cross the border in search of better situations to live. Nevertheless now that the world-wide police is weak, the chaos crosses each nation that comprises of the present system-world: Capitalism. As a result of the previous thing, the transformation of the parties must completely be sensible to these changes to offer solutions. Nevertheless we have a State with a power that is underestimated in comparison with the one of the market, now are not the international governors that commands, but companies and all those supranational agreements that grant to external personages strong amounts to him of being able and influences within our territory, begin to be they the most important actors within the decision making in the country. The political parties are debilitated before such changes and they do not respond with effective proposals and solutions before the crisis that is approached and many others. The previous ones can be considered like external factors of the crisis that the political parties reflect, like internal factors we can recognize that these organizations, although in theory must respond to the demands of the town and to be representing of their voice and vote before the State, the political parties are seen more and more remote of the society, they have become parties apparatus, electoral machines whose unique function is to organize the process of selection of candidates, to make propaganda and to obtain to votes, have forgotten its social function and dedicated exclusively to exert its political function, they have stopped propagating and defending ideologies between the town and summary to only look for its citizen participation when this means to vote by the candidates that they same choose, the citizens lose their qualitative quality and they become mere percentage related to the results of the elections or surveys of opinion..