Central Bank President Rodrigo Vergara, cleared the doubts that an increase in household debt and the number of debtors with more than one mortgage may trigger a crisis similar to the US “subprime” of 2008.
After his presentation of the latest Financial Stability Report (IEF), President said that although the data showed in the document, that possibility “is not in our base scenario”.
“Overall we see strength in the financial market”. However, in a more realistic tone, he said that the report raises “certain risks” that could involve further problems.
As a recommendation, Vergara said that both companies and individuals have to know well what is their borrowing capacity.
To close, he acknowledged that there is more debt, but the financial burden remains “fairly stable, with the rate at relatively low levels”.
The monetary authority said that the debt is not “per se bad.” In the case of the companies, debt helps to finance investments, and in the case of people it helps to buy durable goods and housing.