The Chilean Trajectory: From Liberalism to Possibilism

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The Chilean Trajectory From Liberalism to
Possibilism
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Risk Premium

• Risk Premium
• When there is a chance that a borrower will not
  repay a loan, the lender charges the true
  interest plus a premium for the default risk.

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Risk premiums and financial crises
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Capital controls

• Capital controls
• Limits on the size, type, maturity, liquidity,
  etc. of international capital inflows or
  outflows.
• According to the IMF, the most common types are
• (a) Payment restrictions on capital transactions
  of commercial banks and other credit
  institutions.
• (b) Limits on direct investment and real estate
  transactions.
• (c) Restrictions on capital market securities.

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Encaje

• Encaje
• Also unremunerative reserve requirement (URR).
  A non-interest-bearing deposit in the Chilean
  Central Bank (1991-1998) valued at 30 of any
  international investment, or payment of a
  one-time 3 fee to recover a deposit within its
  first three years.

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References

• All definitions from
• Oxford English Dictionary (online)
• http//dictionary.oed.com
• And
• Encyclopædia Britannica Online (academic edition)
• http//search.eb.com/