Tuesday, September 26, 2023

Billions leave Colombian banks amidst InterBolsa scandal

Billions of dollars have left Colombian banks since InterBolsa’s liquidation, according to a Tuesday report from Bloomberg News.

Nearly two weeks ago, government regulators essentially shut down the country’s largest brokerage firm after it failed to make a payment on an $11 million loan due to risky transactions that left the financial giant short on cash. As a result, the entire Colombian stock market shut down for six days.

- Advertisement -

Colombia’s Financial Minister Mauricio Cardenas reassured the public by saying that InterBolsa’s problems were unique and not indicative of a “systemwide weakness.” Colombia’s Director of Public Credit Maria Fernanda Suarez admitted, however, that “a situation like…InterBolsa created levels of uncertainty much higer than what we had previous[ly expected]…The reading I have is that a lot of bank treasuries and many institutional investors have said for now, ‘I’ll stay put.'”

Last week, the Colombian government formally announced that they were launching a criminal investigation againt InterBolsa to see if its downfall also included tax evasion, a failure to disclose public information and stock manipulation. InterBolsa’s President, Rodrigo Jaramillo, was quick to assure that there is no evidence to believe any “irregularities” or “conflict[s] of interest” took place during the company’s collapse.

President Juan Manuel Santos consistently told InterBolsa investors that they would not feel the brunt of the liquidiation crisis. Last week it was reported that investors were to start receiving cash reimbursements from the failed brokerage firm beginning on Monday. The auditor in charge of overseeing the liquidation process determined that the brokerage firm had nearly $4 billion on hand and of that, $44 million was to be equitably dispersed so that “all customer accounts [are] returned.”

Despite the instability, unscrupulousness, or cloudiness hovering over Colombia’s financial markets, the World Bank recently approved a $200 million loan to the country because of its “good fiscal management.”

- Advertisement -

Colombia’s largest bank, Bancolombia, took over InterBolsa’s troubled bond trading wing two weeks ago and thus supposedly restored investor confidence as Colombia’s peso recorded its highest spike in months.

Confined or not, the failure of the country’s largest brokerage firm has made an international splash. David Olivares, an analyst at Moody’s Standard & Poor’s on Tuesday commended Bancolombia’s move, calling it “a sensible reaction.” Olivares then qualified his statement saying, “It’s difficult to know if there’ll be more cases. We can’t rule it out.”

From Colombia Reports

- Advertisement -

FACT CHECK:
We strive for accuracy in its reports. But if you see something that doesn't look right, send us an email. The Q reviews and updates its content regularly to ensure it's accuracy.

Rico
Rico
"Rico" is the crazy mind behind the Q media websites, a series of onlinemagazines that includes TodayColombia.com. Rico brings his special kind of savvy to online marketing. His websites are engaging, provocative, informative and sometimes off the wall, where you either like or you leave it. The same goes for him, like him or leave him.There is no middle ground. No compromises, only a passion to present reality as he sees it!

Related Articles

Colombia has one of the lowest minimum wages in Latin America

QCOLOMBIA - 2023 starts and with it many of the workers...

Colombia and Venezuela reopen border crossing after 7 years

QCOLOMBIA - Colombia and Venezuela on Monday, September 26, 2022, reopened...
- paying the bills -

MOST READ

- paying the bills -

WANT TO STAY UP TO DATE WITH THE LATEST!

Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!