Professor Cesar Ferrari He arrived in the country in 1999 from Peru and just like his parents did when they left Italy to go to the nation of the Incas, he put down roots in Colombia. For two decades it was Professor at the Faculty of Economics of the Javeriana University.
Ferrari soon will return to Peru as Financial Superintendent to see how it is that in the country where he was born, with a political crisis with the fall of 10 presidents in 20 years, there is no dollar volatility like the one Colombia has experienced.
(See: The reasons why gasoline in Colombia does not stop rising).
What does 100 years of financial supervision in Colombia represent?
It is a source of pride and importance for the country that there is an institution that developed in 100 years, has established itself and is at its peak. Learning has improved the Superfinanciera.
What are the regulatory advances compared to other countries?
When regulations are imposed, it is important to look at what is the golden mean so as not to overregulate or be deficient, since both factors can be bad. Colombia needs deep and developed financial markets, such as in which credit can represent up to 200% of GDP, but in Colombia it is around 54%. The most serious thing is the Colombian Stock Market, where 3.7% of GDP is traded in shares. In others it can be 300% of GDP, which means that there is enormous room to expand. I believe in that and regulation should help. You have to develop and promote them.
Will bag integration help?
The integration of the Colombian, Peruvian and Chilean stock markets is only part of the equation. The problem is that we start in terms of GDP, from high levels of consumption, 91%, and savings of 9%. But saving is transformed into investment and since the market is so shallow, what happens is that there is little intermediate between these two factors and that must be overcome.
In countries like Korea and China, savings can be between 35 and 40% of GDP and when transformed into investment, that is why they grow so much. In this context, of course foreign investment is welcome, because it helps us to complete a very scarce savings and investment like the one we have in Colombia.
(See: The meat will fall in price, as announced by the Association of Refrigerators).
How is the Colombian financial system?
Stable and solid, but it has to go deeper so that we have lower financial costs, that are close to international ones, and that has an important reason, and that is that if in Colombia they are higher than 20%, how do you compete with a country like Korea where they are 7% and that is a problem that has to do with the health of the companies, since these costs, plus others such as services, hit profits and these are a key part of savings. All of this becomes a vicious circle that has to be overcome, among other things, by making the markets more efficient.
What do you think of the drop in rates on some bank credit cards and two on some credits?
The Banco de la República has been increasing rates to face inflation, although lately in a less rapid manner and this has been transmitted to commercial rates that reached absurdly exaggerated levels. I am pleased that some banks have begun to lower their rates and that is healthy and welcome and should continue in an environment in which we are looking to deepen the market.
Prudence and good sense are advisable and so should the regulator.
(See: Colombia’s GDP grew 3% in the first quarter of 2023):
Are you concerned about credit deterioration for families who may get into trouble paying?
I would worry if we were not aware of why it happens and what can happen next. It is a logical process of understanding and the main correction is to reduce consumption, but of course, not of the lowest strata but at the highest levels and that companies generate profits so that there are savings and encourage exports.
Open data is key
“Beyond what is being born with ‘open banking’, it is not only the open information of the banks, but that of open data or open data that will ultimately lower interest rates and increase competition. It was established in the Development Plan and we are in full construction to make it operational and it must be fast. We are going to review the regulation of the Financial Superintendence to allow a greater depth and development of the markets. About cryptocurrencies we know who buys them, but we do not know who produces them and it is a market failure. That’s why there is a big speculation”.
(See: César Ferrari took office as Financial Superintendent (e)).
HOLMAN RODRIGUEZ MARTINEZ
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