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Archive for December 19th, 2025

100 years of Central Bank of Chile

December 19, 2025

Central Bank of Chile was established in 1925. The year 2025 marks its centennial.

The central bank of Chile has put up a website to mark its centenary. The central bank organised a conference.

Rosanna Costa, Governor of the Central Bank of Chile gave a speech:

Good morning. Thank you for being here. This has been a very significant year for the Central Bank of Chile. Reaching 100 years is a major milestone. We have had a year full of activities, seeking to connect and share with the community, with people.

This Conference is the culminating point of this commemoration, connecting us with the knowledge that nourishes and strengthens our actions. We are so pleased to have all of you here.

Our centennial has also been a time for reflection about ourselves, our origins, and our future. Economic history begins with humanity. After all, economics is nothing more than the study of scarcity to meet ever-growing demands and the process of creating and adding value, which is intimately linked to the imperative of choosing when faced with the dilemmas that scarcity presents us in all its dimensions.

From autarky to barter, the great economic advances are social steps that naturally and rationally led to specialization and exchange. It is hard to visualize the great leap that money represented, even in its most primitive forms. Humanity took many steps to develop reliable money, that would be widely accepted and easily transported. These steps are closely linked to social evolution and the way we organize ourselves in communities.

Central banking is very young in this temporal dimension. Its development has gone hand in hand with a primary objective: stability, which has not changed, although the way we achieve it has, as a result of experience and the advancement of knowledge.

Today, central banks operate amid pillars we recognize as essential, such as autonomy, independence, technical knowledge, and transparency, all intertwined in building trust and credibility. These are principles we treasure because they allow us to be more efficient in achieving our objectives.

Now, I will review the history of our own central bank, what we have learned from it, and from there invite you to reflect on the challenges of the future, the central theme of this Conference.

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Tech stock performance across US and China: what explains the differences?

December 19, 2025

Livia Pancotto and Yui Ching Li in this BIS report points how tech stock performances differ in US and China:

Tech stock performance has diverged markedly around the globe in recent years. Large technology firms in the United States and China have followed different trajectories, driven by earnings prospects, business models, regulatory conditions and risk premia. While advances in artificial intelligence (AI) – and the investor interest surrounding them – have boosted valuations of a subset of firms, they do not fully explain the differences across global technology markets. This box examines the market performance and global footprint of US and Chinese big tech firms and compares their valuation patterns with those of major technology firms in other economies.

The stocks of US technology firms have risen much faster than the overall market and Chinese counterparts. The US “Magnificent 7” (M7) have consistently outperformed the S&P 500, especially since the public release of ChatGPT in late 2022. Such strong gains were underpinned by solid earnings (as discussed in the main text), improved operating efficiency and sustained AI-related investment and demand. These dynamics have strengthened the M7’s global footprint, with their share in global equity benchmarks recently approaching one quarter of total market capitalisation.

By contrast, China’s “Terrific 10” (T10) experienced a sharp rally through 2020 and early 2021, fuelled by strong earnings momentum and the pandemic-driven surge in digital adoption. The upswing, however, gave way to a prolonged correction due to regulatory tightening, weak domestic demand and a shift in global investor appetite away from Chinese assets. More recently, prices have begun to recover amid renewed interest in domestic AI developments following the DeepSeek release in January 2025 and signs of a more supportive policy stance for the tech sector, which have helped lift investor sentiment. Nonetheless, their global presence remains well below previous peaks and modest compared with M7.

Valuation patterns mirror these divergences. The M7 have elevated valuations within a relatively narrow range, consistent with investor beliefs of strong earnings growth prospects, established business models and investor optimism about potential AI-driven productivity gains. T10 valuations are generally more subdued and more varied, reflecting higher risk premia, regulatory uncertainty and pronounced swings in investor sentiment. Global tech peers outside the United States and China show intermediate valuation levels with moderate dispersion, possibly due to broader business model diversification and lower sensitivity to region-specific shocks.