1. C HILEAN FINANCIAL MARKETS AND INSTITUTIONS Whitney Casey Leigh Barter Sarah Kate Cameron Adam Middleton

2. F OUNDING OF C ENTRAL B ANK OF C HILE 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

3. O RIGINAL S TRUCTURE 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

4. D EVELOPMENT 2 nd bank law: empowered the Central Bank to grant credits to the State and other state bodies 3 rd bank law: expanded the Bank’s powers in terms of controlling credit and setting reserve requirements 4 th bank law: created a Monetary Council and gave the Bank authority to set more expansive monetary policies

5. C HILEAN F INANCIAL I NSTITUTIONS : T HE C ENTRAL B ANK OF C HILE The Current Structure Autonomy Flexible Horizontal Organization General Manager General Counsel General Auditor

6. T HE F UNCTIONS OF THE C ENTRAL B ANK OF C HILE 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

7. T HE C ENTRAL B ANK OF C HILE O RGANIZATION AND F RAMEWORK The Board Conclusion Why the need for an autonomous central bank?

8. F OUNDING OF S ANTIAGO S TOCK E XCHANGE Founded November 27, 1893 Many of the original members were mining companies

9. D EVELOPMENT 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

10. M OVEMENT TOWARDS F REE E NTERPRISE 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

11. R ECENT H ISTORY 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

12. I NVESTING IN CHILE Chile has a very secure and attractive market for investors Open Economy solid institutional framework macroeconomic stability credible policymaking

13. I NVESTMENT 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

14. 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

15. 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%

16. I MPORTS 2009 U.S. Dollar Amount = 39.75 billion Commodities Petroleum and Petroleum Products Chemicals Electrical and Telecommunications Equipment Industrial Machinery Vehicles Natural Gas Etc.

17. E XPORTS 2009 U.S. Dollar Amount = 53.74 billion Commodities Copper Fruit Fish Products Paper and Pulp Chemicals Wine Etc.

18. C HILE ’ S M AIN T RADING P ARTNERS ImportExport