Chile Watch: Banking law, regulator merger, Banco de Chile-Transbank

Chile's President Sebastián Piñera (pictured) signed a banking bill into law.

The law, which amends existing legislation, brings sector rules in line with Basel III solvency standards.

"The banking law will reduce the probability that a bank fails, because it involves a higher solvency standard," the finance ministry said on Twitter. "This also protects the treasury from having to implement a bailout, looking after the country's resources better."

The legislation also encompasses areas such as cybersecurity.

Former president Michelle Bachelet had submitted the bill in 2017.

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In related news, the process of integrating banking regulator Sbif into securities and insurance watchdog CMF will begin on June 1, finance minister Felipe Larraín told reporters.

The creation of a single, combined watchdog is among the key changes contained in the banking law.

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Local commercial lender Banco de Chile told reporters it was not looking to sell its stake in payment acquisition company Transbank.

The news comes after another of Tranbank's main owners, Santander, announced it was offloading its interest in the bank-owned firm.

Banco de Chile, however, did say it was working on a model to list Transbank on the stock exchange, local paper La Tercera reported.

The lender also said it was looking to follow in the footsteps of Santander, its main rival, by adopting a four-part model within the payments chain.

Under this scheme, the roles of acquirer, issuer, merchant and cardholder are separate. Some have said this is necessary to spur competition and innovation.