During the installation of the 36th capital market symposium, Leonardo Villar, manager of the Bank of the Republic, said that In the long term it is necessary to raise age and contribution quotation amounts so that people can pension in Colombia.
For his part, Jonathan Malagón, president of the Banking Association and Financial Entities of Colombia (Asobancaria), presented the challenges and advances of the local capital market.
Read: Colombian capital market registered sustained growth in the first semester
It is worth mentioning that the number of emitters remains reduced and the depth of the market is low, with a capitalization equivalent to 17.4% of the gross domestic product (GDP)lower than that of even countries in the region. In addition, regulations persist that hinder emission processes and limit the growth of the sector.
The union leader stressed that the investment has been recovering and is already around 16.6% of GDP: “Much of that resurgence of the investment in the last twelve months has been given by the banks, of the financial sector and, fundamentally, of the agreement for the credit. That growth in the investment has not been financed by the equity of the shareholders, but by the banking sector.”
In this context, Malagón highlighted two positive or “lights” aspects, such as the fact that The Colombian stock market index (MSCI COLCAP) is one of the most valued in the world so far this year, with a growth of 31%, above Chile (21%), Mexico (17%), Brazil (10%) and even, even indices that are quoted in the main bags of the world, such as London (12%), New York (8%) and Tokyo (2%).
He also stressed that today it is possible to channel resources to small and medium enterprises through the A2Censo platform, which in 2024 irrigated $ 17,000 million, more than double what was recorded in 2019, when this collaborative platform of the Colombian Stock Exchange began.
Colombia Stock Exchange.
On the other hand, he identified two “shadows” that have the potential to limit the development of the Colombian capital market: the fiscal deterioration and the regulation of the fund that creates the pension reform.
In the Fiscal Front, he recalled that the level of imbalance for this year “can become more than 7 points of GDP and bring Colombia’s indebtedness to the dangerous levels of 60% of GDP, where it is already beginning to be at risk of the sustainability of our public debt. That is a concern that, without a doubt, passes the invoice to the capital market. It is an issue that we are following in great care”.
As he explained, the increase in indebtedness generates greater pressure on debt markets, raises financing costs and limits the margin to apply contracíclic policies in the future, which reduces investors’ confidence in the public fixed income market.
Regarding the subject pensionional, stressed the importance of knowing the regulation of the fund that will be administered by the Bank of the Republic, the mechanisms for the transfer of resources and the guarantees on its management. “While it is true that there has been a great effort on the part of the authorities to regulate pension reform, some doubts and some uncertainty about the management of the fund still persist,” Malagón said.
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It is noteworthy that the funds that will be transferred by the Pension Fund Administrators (AFP) have a 31% participation in Treasury Titles (TES) and handle volumes of annual contributions exceeding $ 30 billion.
The Bank of the Republic and the pension fund
For his part, the manager of the Bank of the Republic, Leonardo Villar Gómez, said, before the Constitutional Court again returned to the House of Representatives the pension reform project to correct the process vices, that “it will continue to offer all its collaboration so that the actors involved work in a coordinated manner and with the required speed, thus ensuring the correct implementation of the savings fund of the savings of the savings of the savings of the savings. (FAPC), once the judgment of the Constitutional Court on the exequibility of the law is known and the date on which according to the Court it must enter into force ”.
In addition, he assured that the challenge for making the long -term pension system sustainable will surely require adjustments in the system parameters, particularly in the retirement ages and in the price percentages of the affiliates. The need to advance in that direction remains latent and is not altered at all due to the role of administrator of financial resources that the Bank of the Republic will comply.
The challenge for making the long -term pension system sustainable will surely require adjustments in the system parameters, particularly in the retirement ages and in the price percentages of the affiliates.
He revealed that the issuer team has advanced multiple activities for its enlistment as the Fund Administrator, even before the registration decree of May 28.
He said that the Bank of the Republic seeks to implement best practices in terms of internal governance for decision -making, contracting portfolio managers, monitoring of their management and operational capacity, among others.
Regarding internal governance, last February the Bank Board of Directors approved the creation of the FAPC Administrative Committee
See, in addition: ‘Ghost to go down to Mercado Frontera continues, despite improvements’
