By Patricio Guzmán
For years the mainstream media Chile communication accustomed us to receive such positive news of the good positioning of the Chilean economy in the ranking of global competitiveness.
From the standpoint of the working population had not really great cause for celebration, held that the proper place reached was largely a result of privatization, deregulation and labor flexibility, or of job insecurity, inequality income, capitalization face and forced into the system of individual capitalization pension funds - the AFP - and the loss of guaranteed social rights, but now Chile has dropped to number 28 in global competitiveness ranking, y la respuesta hay que encontrarla en la creciente concentración de la banca, y en el alto spread bancario[1], producto de esta concentración. La banca chilena no traspasa, o traspasa sólo parcialmente, al grueso de sus clientes las tasas de interés privilegiadas del 0,5% anual que aplica el banco central. Aquí encontramos igualmente la explicación de la alta rentabilidad de los bancos en Chile.
Los bancos estan entre las empresas de mayor rentabilidad en el país. En el primer trimestre del año 2010, los bancos que cotizan en bolsa, y están incorporados al índice IPSA, aumentaron las utilidades medidas respecto a igual periodo en el año anterior en un 62,9%. El IPSA es el principal índice Chilean stock market, brings together 40 companies, including: Banco de Chile, BCI, Corpbanca and Santander. The first quarter of 2009, these banks accounted for 16% of the profits of the IPSA, and in the same period of 2010 came to represent 25% [2].
profits on interest rates.
The bank tends to raise interest rates and more restrictive in recessionary times. High banking spreads
reduce the country's competitiveness.
According to the World Competitiveness Report 2010 prepared by the Institute for Management Development (IMD) in Switzerland, the drop in the ranking of Chile (site 28, the lowest in 10 years), partly due to high banking spread, that puts the country in the post 47 of the listing.
The report states that in local banks, the average spread of 5.77 points compared to 0.33 points, which tracks the UK, which is a pointer.
According to the Association of Banks and Financial Institutions, "Chile shows one of the lowest levels of spread among the major economies of the region in the period 2000 to 2008" In the last year, said Chilean differential compared with 35.59 % of Brazil or 20.17% in Peru. Was only 5.66% higher than in Mexico.
... banks apply a cost overrun for SMEs ... on the contrary ... the big companies have the most competitive spread the world. "[3]
The Chilean economy is among the countries with the largest banking spread in the Competitiveness Ranking, with a decline in this indicator than ten years. [4]
concentration of banking. Two facts speak
specific concentration in banking. In April 2010, the first three private banks accounted for 52.4% (31.3% in 1990) and banks are 25 (38% less than in 1990).
In 1990, the three largest banks concentrated 31.3% of the business.
In 2000, the three largest banks concentrated 39.1% of the business, ie increased concentration in the three main
7.8% In April 2010 three largest banks had come to control 52.4% of the business, or an increase of 13.3% of the concentration in the three largest banks.
concentration is also clearly the evolution of the number of banks and financial institutions operating in Chile. In 1981 were 62 in 2010 are 25.
"... competition in Chile today is largely provided by non-bank credit providers, and should take into account the challenges that this involves the monitoring of these players." [5]
Profits of major banks, 2009Resultado%%
before ParticipacionParticipacion
impuestoss / Dec-09
sistemaacumulado
Banks established in Chile1.384.127
Chile525.16835 Santander, 16% 35.16%
De Chile297.48419, 92% 55.08% Credit and Inversiones191.42112
, 82% 67.90 Corpbanca101.1366
%, 77% 74.67%
BBVA80.8675, 41% 80.08%
Profits of major banks, 2008Resultado%%
before ParticipacionParticipacion
impuestoss / sistemaacumulado
Dec-08
Chile1.077.067 banks in Santander-Chile394.74532, 03% 32.03%
De Chile310.23725, 17% 57.19% Credit and Inversiones183.33714
, 87% 72.07%
Corpbanca67.1775, 45% 77.52%
BBVA48.9033, 97% 81.49%
The painting was elaborated with data from the Superintendency of Banks and Financial Institutions, note the jump from the position of Banco Santander from 2008 to 2009, and the percentage decline of all other major banks, especially Bank of Chile that although remains the second actor in the business, fell 25% to 19% share in the profits, and is far outweighed by the bank Santander.
In 2009, Banco Santander reported a return on equity after tax of 34.85%, ie three years in this bank in Chile recovered its capital! Not surprisingly, the Chilean bank is the most profitable of all the Santander group in the world.
The return on equity after tax, in the same period, other major banks were: Banco de Chile 22.72%, from 21.86% Credit and Investment; Corpbanca 20.34% 16.50% BBVA. [6 ]
The increasing concentration, high unemployment, and difficult and expensive access to credit have become three problems of capitalist accumulation in Chile. Increasing concentration
placement credit. Area in which the financial sector is an advance. Five banks earn more than 80% of the profits of the business.
seven banks in 1990 gave 67% of total loans, today only four account for 68% of funding. Some banks have higher rates of return on equity above 30% Unemployment
high.
According to official figures from the INE's unemployment rate in the country reached 9 percent in the first quarter, January to March 2010. High youth unemployment. 20% young people aged 15 to 19 years in the labor market or intend to do, this percentage reaches 27% if only women.
Reduced capacity of smaller companies to provide new employment contract. Lack of stability, so they can not hire providing stability to the workers employed. However, according to Sebastian Piñera these companies represent 99% of companies in Chile, 60% of employment, but only 25% of sales and 2.5% of exports.
difficult access to credit.
shortage of credit for smaller firms. Disappearance and stagnation of smaller companies.
In 2008 there were 819,140 trade receivables, of which 98.5% were micro, small and medium enterprises. But its share in total debt was only 15%, while 85% of the loan will be concentrated large or mega companies.
Just four years earlier, in 2004, SMEs had a placement rate of 19% credit. [7]
The bank loans are given primarily to the large, mega company.
Four thousand large commercial debtors in Chile account for 51% of total debt in the banking system but are less than 1 per 1,000 debtors.
The 700 largest debtors of the banking system, 1 in 7,000, have 38% of total debt with an average of $ 85 million dollars each. [8]
An oligopolistic economy
Away from the competitive economy [9], advocated by neo-liberal economists, the Chilean financial system is a machinery of oligopolistic concentration throughout the Chilean economy.
"Perfect competition is a difficult phenomenon to observe, because one of the points that is required is that there is perfect substitution between goods in the market, but companies react to this, they do not want to be competitive, because they want to market to higher profits. Companies are always looking to differentiate, and when they do they are able to establish a monopoly for a small group of customers. This is monopolistic competition. "(Miguel Vargas, a researcher at Universidad Diego Portales)
Although neo-liberal propagandists of the supposed benefits of the capitalist economy insist that the" free market "is the most efficient allocator of resources, the reality is that companies are not interested competition. Looking for your own 'niche' market with differentiated products, preferential access to credit, price collusion and through concentration, to keep out competitors and 'loyalty' to customers, ensuring their own monopoly segment. The natural logic of capitalism point to the greater inefficiency in the allocation of resources 'monopolistic competition', and the less effective anti-monopoly regulation exists faster the process of concentration.
"The increasing concentration of financial systems in the world is really worrying. Globally, the concern current is mainly about financial institutions are becoming too big to fail "
The bank is in the center of the capitalist crisis
Banking in Chile is a clear example of this, but it is a problem worldwide.
banking is supposed to justify their existence by borrowing more dynamic investment and consumption, which in turn accelerates the growth and capital accumulation. Now we find that in reality the capitalist banking is responsible for the downfall of global growth.
When the authorities say the biggest banks have reached a size that can not be left to fail, and to avoid assumptions greater evils, are forced to save, ie, reward poor management and usury, - but do not accept the nationalization under the control of society - transforming their massive private debt losses, it is implicit blackmail. The same people who for decades justified privatization and budget cuts for social spending, arguing that the state was wasteful and inefficient, went to argue that the state had to save them because "If we fail unemployment will soar and collapse the economy. " But then when the debt and fiscal deficit passed the bill adds that "workers are living on the possibilities and we must take drastic austerity measures and labor flexibility. "
always good to remember that it was from the large-scale speculative business of banking which started the global recession, which the world still immersed, now transmuted into debt crisis and the high fiscal deficit in developed countries.
Many so-called 'bad practice' in multinational banks such as Goldman Sachs, led to the bankruptcy of AIG, the largest U.S. insurer, which had to be rescued with public money. Greek and Hungarian governments released the fiscal deficit situation was much worse than they had been reporting to their European Union partners, with the help of Goldman Sachs to hide items, and we could go with a long list of practices outright criminal behavior.
Unlike what happened in the U.S. and other developed countries, banks in Chile maintained its high profitability during the crisis, including increased despite the recession that hit the economy in 2008. But there is a similarity, over the cost of gain was to subsidize them with tax money annual rate of 0.5 while continuing to apply high interest rates to their customers relying on high-risk course.
[1] The banking spread is the difference between the interest rate that banks charge for loans that place, and the interest paid by the money they receive.
[2] strategy, Monday, June 8, 2010. Banks accounted for 25% of the profits of the Companies of IPSA
[3] Strategy, Monday June 7, 2010. Is there competition in the Chilean banking?
[4] http://www.estrategia.cl/detalle_cifras.php?cod=3475
[5] strategy, Monday, June 7, 2010. Blaschke Winfrid interview
OECD [6] Information obtained from data from the Superintendency of Banks and Financial Institutions.
[7] Strategy, Monday June 7, 2010. Venerando "Monopoly?
[8] Strategy, Tuesday June 8, 2010. Ernesto Livacic. Distribution of debts and taxes.
[9] The theory of competitive markets on the assumption that any company can have the power to affect the market price of a commodity, to be determined by the interaction of supply and demand.
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