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[POLITICS] · Chile · 4 sources

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Chile parliament moves to ban compound interest in banking

compound interest ban Chile anatocismo Central Bank warning financial legislation

Deputy Héctor Ulloa introduced a legislative amendment to prohibit anatocism – the practice of charging interest on interest – as part of a broader reform package. The Chilean Chamber of Deputies approved the amendment by a vote of 79, and the Senate subsequently ratified it. The Central Bank of Chile broke with its usual prudence to warn that the measure would undermine basic economic principles, raise simple interest rates, and erode savings returns for households and small businesses. The executive branch is preparing a presidential veto, arguing that the ban would not lower credit costs but would instead shift the burden to borrowers and savers. No other country has enacted a law banning compound interest, making the proposal unprecedented.

Analysts note that eliminating the capitalisation of interest would force financial institutions to redesign products, likely leading to higher loan rates, stricter lending conditions, and reduced access to credit for vulnerable sectors. The debate highlights the tension between consumer protection goals and the economic realities of credit markets.

Entities

Central Bank of Chile · Héctor Ulloa · President of Chile

Claims

What the coverage asserts, and how many sources carry each claim.

Sources

No se puede legislar contra la aritmética [elproa.cl]
2 months ago
Interés compuesto: no se puede legislar contra la aritmética [elpensador.io]
2 months ago
No se puede legislar contra la aritmética [www.diarioelheraldo.cl]
2 months ago
Medidas paradojales - La Tercera [www.latercera.com]
2 months ago