Financial Committee meets with the Minister of Finance and with representatives of the Central Bank of Chile

Tuesday, march 17, 2020

In its second session of the year, held on Friday, March 13, 2020, the Financial Committee met with Minister of Finance, Ignacio Briones, and a delegation from the Central Bank of Chile, led by the Manager of the Financial Markets Division.

The Minister of Finance thanked the Committee for its work since the beginning of the Sovereign Wealth Funds, highlighting its role played in defining investment policies for both the Economic and Social Stabilization Fund and the Pension Reserve Fund. The members of the Committee appreciated the words of the Minister of Finance and expressed their willingness to continue working on the different initiatives related to the Sovereign Wealth Funds.

The Central Bank of Chile (CBC) reported on its performance in 2019, the main positions held in both funds, and the results of an assessment carried out to the current custody service. In addition, the CBC presented a schedule of activities for the selection process of external managers for equities and corporate bonds in the Pension Reserve Fund. This process will be carried out following the same standards used in similar processes for the CBC’s International Reserves, including the support of a consulting firm.

Subsequently, the Financial Committee expressed its agreement with the recommendations made by its Technical Secretariat regarding the strategic asset allocation for the new Strategic Contingency Fund. It should be noted that said fund was created by Law No. 21,174, which establishes a new mechanism for financing the strategic capabilities of national defense and that repealed the Reserved Copper Law.

The Technical Secretariat also reported on the current status of the strategic asset allocation study for the Economic and Social Stabilization Fund. The Secretariat noted that is compiling the information requested by the consulting firm RVK, Inc., which is in charge of preparing the study of the fund's investment policy.

Finally, the members of the Financial Committee analyzed the main results of both Sovereign Wealth Funds, with special emphasis on the impacts caused by the coronavirus outbreak in the financial markets.

External and autonomous, the Financial Committee is made up of professional experts with extensive experience: José De Gregorio (president), Cristián Eyzaguirre (vice president), Ricardo Budinich, Jaime Casassus, Martín Costabal and Paulina Yazigi.

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