Chile Central Bank Cites Risks to Home Builders, Mid-Size Banks

Chile’s central bank cautioned today that the rapid growth of home builders and medium-size banks expose the two industries to “vulnerabilities.”

Home builders have taken on more debt, while mortgage lending for their clients has become less restrictive, the central bank said in its bi-annual financial stability report today. Those two factors create financial vulnerabilities for real-estate and construction companies as well as households.

Medium-size banks are growing faster than their larger counterparts and may become increasingly exposed to the threat of cyclical factors, especially as lenders run the risk of underestimating the threats posed by credit card debt, the central bank said.

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