ALEJANDRO RUBILAR, SENIOR COUNTRY COUNSEL – CHILE, J.P. MORGAN
Alejandro Rubilar describes how a stable financial sector, coupled with a push for world-class regulatory standards, have made Chile a competitive market for both local and foreign players.
‘Following graduation from law school, I started as counsel for the legal department of Banco de Chile. Shortly after, I was offered a position with Citibank, and I worked for almost a decade for the corporate and investment bank, ultimately as head of investment bank legal. During that period, I also had the opportunity to join Shearman & Sterling for a couple of years as an international associate in the finance group based in New York, before returning to Citibank. I joined J.P. Morgan in Santiago in 2008 as general counsel for the Chile branch and, last year, I assumed additional responsibilities as head of corporate affairs legal for Latin America.
Banking regulation enacted in Chile in the early ‘80s following the banking crisis has become a model in a number of Latin American countries and, together with a stable and growing economy and sound public policies, has contributed to a strong local financial system. Although not immune to global turbulence because of its interconnectedness, the Chilean banking system has proven to be quite resilient to international instabilities, particularly during the last global financial crisis.
There is no doubt that regulatory change and a new standard of market practices on transparency and compliance are redefining certain strategic priorities in the Chilean financial sector. It is a highly competitive market with a variety of players and new foreign banks obtaining licences in Chile, which is good. Harmonising global documentation standards and policies with local market practices is always a challenge, together with bringing international best practices to the local marketplace.
Focus on implementing regulatory changes – adequate mapping of applicable rules and laws and strengthening controls, supervision and escalation protocols – and appropriate knowledge of cross-border regulation is the name of the game. The influence of these external factors in the banking industry is reshaping the way legal departments add value to firms, and senior management is turning to Legal to ensure first-class standards are adopted.
There are upcoming elections in Chile on 19th November, but Chile is quite a stable and predictable country from a regulatory perspective, and a government change to any of the usual political coalitions that have governed the country in the last 25 years should not represent any “big bang”.
Regionally, we have elections on the horizon that could bring more future visibility for Latin America. If the new governments continue implementing key reforms, and without a major negative global event, we may see increasing investor appetite for Latin American assets, which will bring more transactions and business for all banks, including J.P. Morgan. The legal team shall support that.
Transactional activity continues to be critical, and at J.P. Morgan, we expect more activity, mostly on the side of debt capital markets, given the increased volume of bonds maturing in the next few years. 2010-2012 was a period of extraordinary growth for Latin America and back then many companies issued 10-year bonds. All that debt is coming due and most issuers won’t wait until the last minute to refinance. The volume of international debt issued in Chile since January is more than double last year’s, and we expect this trend to continue – so there will be increased legal activity on that front.’