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8 - Chile
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- By Salvador Valdés, Francisco Ugarte, Cristián Eyzaguirre, Carey y Cia. Ltda., Santiago, Chile
- General editor Maher M. Dabbah, Queen Mary University of London, K. P. E. Lasok QC
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- Book:
- Merger Control Worldwide
- Published online:
- 30 July 2009
- Print publication:
- 29 May 2008, pp 32-33
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Summary
Introduction
Since the publication of the Main Work, the major event in the Chilean merger control scene has been the publication by the Fiscalía Nacional Económica (FNE, the governmental entity in charge of investigating competition law violations) of its non-binding guidance (the “Guidelines”) in October 2006 on different aspects of merger review, including the criteria that the FNE shall use when analysing horizontal integration cases (but excluding vertical integrations).
The FNE has incorporated in the Guidelines some principles or criteria that were already applied by the Chilean Antitrust Court. The Guidelines include an important clarification: they fix the threshold of degree of concentration that the FNE will use based on the Herfindahl–Hirschman Index.
Degree of concentration
After determining the companies participating in a relevant market (including those based outside Chile, when applicable), the FNE will establish market shares mainly by considering the sales of each participant in monetary terms; however, the FNE may use other considerations to complement or replace sales (e.g. sales in units, production and installed capacity, inventory and reserves of natural resources).
The FNE will use the Herfindahl–Hirschmann Index (HHI) to measure the levels of concentration of a particular market before and after a merger or acquisition. The FNE will deem that an operation does not have anticompetitive effects, if:
the post-merger HHI is less than 1,000;
the post-merger HHI is between 1,000 and 1,800 (this value indicates a moderately concentrated market) and the variation of the HHI resulting from the merger is below 100; or
the post-merger HHI is greater than 1,800 (this value indicates a highly concentrated market) and the variation of the HHI resulting from the merger is below 50.
12 - Financial liberalization and the capital account: Chile, 1974–84
- Edited by Gerard Caprio, The World Bank, Izak Atiyas, The World Bank, James A. Hanson, The World Bank
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- Book:
- Financial Reform
- Published online:
- 20 May 2010
- Print publication:
- 27 January 1995, pp 357-410
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Summary
Introduction and overview
Many countries, developed and developing, are liberalizing their domestic financial markets. Often such liberalization is accompanied by a reduction in regulatory and other barriers to international capital mobility. In the aftermath of several liberalization experiences, however, the compatibility of these reform measures – liberalization of domestic financial markets and opening of the capital account – has been questioned. One of the main reasons is the unfortunate (some would argue anomalous) Chilean experience. Between 1975 and 1977 Chile liberalized its domestic financial market. In 1980 the capital account was liberalized for domestic banks, a policy that some authors regard as one of the main causes of the excessive buildup of foreign debt and the subsequent steep recession that ensued in 1982. For example, analyzing this episode from a macroeconomic point of view, Harberger (1985) argues, “The process of relaxation of capital controls should have been slower and more cautious, with the end in view of not letting the inflow of capital get more than, say, a couple of percentage points above the sustainable level.”
This study discusses whether the 1980 opening of the capital account for domestic banks was indeed an important causal factor in the dismal macroeconomic performance of the subsequent period. In order to sharpen the analysis, the study also examines a number of counterfactual policies, such as liberalizing earlier and maintaining capital controls for banks in 1980, given the other distortions that were present.