IMF and World Bank highlight “strength” of the Colombian financial system

In the Financial Stability report published on April 5, the International Monetary Fund (IMF) and the World Bank (WB) highlighted Colombia for different variables that affect its economy. The study highlights financial stability, macro-prudential institutionality, compliance with the principles of effective supervision, the framework for crisis resolution and management, and the advances in climate risks in Colombia.

In their report, FSAP evaluators concluded that in the face of stress scenarios, banks in Colombia show solvency and liquidity levels that make them resistant to possible economic crises, something that was evident during the pandemic-induced crisis in 2020 and 2021.

They also highlighted advances in banking supervision in line with Basel's principles of effective supervision. In particular, multilateral agencies point out that of Basel's 29 principles of banking supervision, the country went from having 41% of them complied/widely in 2012 to 90% in 2021.

They also noted that “macro-prudential oversight is effective and that the crisis management framework has been considerably strengthened by the incorporation of structural reforms that include new resolution mechanisms and instruments”. This has allowed the identification of crisis tools and the exchange of information and coordination in the Financial Safety Net.

The report also mentioned the Colombian Government's management of the pandemic. The experts noted that the current administration has made sound decisions on this issue.

Regarding financial inclusion, the Government assured that it has a strong and sustained commitment from the public sector, which, together with legal and regulatory reforms, allowed access objectives to be achieved, which must be complemented by pending developments for digital payments.

They also noted that in the area of money laundering and terrorist financing management, the country has made significant progress in aligning its regulatory framework with the revised Financial Action Task Force (FATF) standard.

This exaltation is in addition to recent statements by the OECD by international representatives of the Organization who called the management of the Colombian education sector as “successful and effective”, since it managed to support its processes in digital media during the pandemic. It was detailed that during this time the relevant skills in the labor market have been strengthened to train children and young people in machine learning, Artificial Intelligence, source code programming, creative industries and digital animation. In addition, courses on integrated services and relational databases were offered.

He also mentioned the training of 107,000 teachers in skills and the adoption of the historical policy of equity: “Bringing public higher education, free of charge, to the most vulnerable people and the emerging middle class, reaching 97% of public higher enrollment in our country,” said the Government national.

Among these milestones, he mentioned that the largest education budget in the history of the country was available: early childhood care extended to 2.5 million children and more than 35 million food assistance packages were delivered. In addition, more than $1.3 billion was allocated to strengthen the educational infrastructure, represented in 250 new schools nationwide and 166 more by August 7; that is, 12,000 new classrooms.

He also mentioned the training of 107,000 teachers in skills and the adoption of the historical policy of equity: “Bringing public higher education, free of charge, to the most vulnerable people and the emerging middle class, reaching 97% of public higher education in our country,” he said.

KEEP READING: