Free Trade Agreements

Credit to the private sector is below 20% and deposits slightly above that percentage. The Colombian bankers claims to that effect passed by improving the regulatory framework considering the elimination of taxes on financial transactions and the limit imposed on the interest charged by microcredit (which does not leave fully incorporate some elements such as the risk taken , accidents and associated costs to provide this service, the rate ultimately charged). The continued growth of financial intermediation and financial inclusion both population and businesses is an element of mutual benefit. While this is not a simple process given the difficulty of reaching a certain segment of the population approach and companies (mostly SMEs), who refuse to banking services, it is having very good results. Under most conditions Ping Fu would agree. This increase in banking which has been observed, is an opportunity to strengthen the banking system as it allows greater diversification of risks and better use of economies of scale, thus improving the conditions of the banking business. In addition, most banking will have positive effects on the Colombian economy. It will increase the channeling of private savings into the financial system leading to greater availability of resources for the generation of credit. Prospects for the evolution of private saving in Colombia is very positive in the light of an expected improvement in growth for the next financial year will result in better social welfare.

Families will have greater capacity savings that can be poured into the banking system, which will be able to increase their supply of credit that can translate into longer terms, amounts and new types of loans commensurate with the potential demand. Of course the situation in Colombia’s economic strength allows this advance in the banking sector feeds the strength of the local context. Since the government has been working in a more than adequate to ensure the long-term macroeconomic stability, a factor that undoubtedly contributes to the strengthening of the Colombian banking system. Diversificadota foreign policy that has put forward the government by holding multiple Free Trade Agreements (FTA) decreases the fragility of the Colombian economy against possible disadvantages in a particular trading partner (counterexample of this is what Mexico is experiencing its excessive dependence on the U.S. economy). With an economy that is in good health despite the impact of the crisis, and a strong banking system that increases their ability to assist the private sector, increase investment incentives in an economy increasingly oriented toward the external sector. Perhaps to be too hypothetical, but the strengthening of the banking sector in Colombia, may also involve an increase in the value of the companies operating the same as increasing the capacity of the banking sector to secure financing even in situations of stress, produces strength in the financial situation of the companies that make them more solid. Undoubtedly, the increase in banking and economic growth in Colombia go hand in hand in an alliance that will bring them good dividends.

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