Description
This article explores how central bank policy responses have built the foundations of a financialised economic regime in emerging economies in Latin America, with a focus on Chile. While financial stability has been widely embraced as a guiding principle, the instruments used to implement it have favoured the re-capitalisation of commercial banks through disintermediation. Since the late 1990s and 2000s, this narrative focus has persisted, as central bankers have framed monetary policy through a lens of economic exceptionalism that relies on technocratic expertise for its implementation and social acceptance. The analysis shows that gradual capital liberalisation, short-term interest rate adjustments, and regular interventions in the exchange market during periods of economic tension, such as the aftermath of the 1995 Mexican Crisis, were accompanied by socio-technical constructions of debt as a moral cost. These dynamics helped normalise the shift toward financial stability as a central monetary objective. By examining official reports from the Central Bank of Chile, the article uncovers how narratives of macroeconomic welfare have been embedded in the discourse of central bankers. Ultimately, the discussion shows how these underlying conditions laid the groundwork for Chile’s current macroeconomic regime. In parallel, it questions how much the central bankers’ expertise and logic in economic policy responses have truly evolved in practice over the last two decades.
