Sustrayendo recursos cuando la regulación es laxa: La crisis bancaria colombiana de los 1980s (Tunneling when Regulation is Lax: The Colombian Banking Crisis of the 1980s)

36 Pages Posted: 26 Jan 2023

See all articles by Carlos Eduardo Hernandez

Carlos Eduardo Hernandez

Universidad de los Andes, Colombia - School of Management

Carlos Caballero Argaez

Universidad de los Andes, Colombia

Jorge Tovar

Universidad de los Andes, Colombia

Date Written: December 6, 2022

Abstract

The English version of this paper can be found at http://ssrn.com/abstract=4292215.

Spanish Abstract: Estudiamos la resiliencia de los bancos a crisis macroeconómicas en un contexto de regulaciones microprudenciales laxas: Colombia durante la crisis de los 1980s. Múltiples bancos se quebraron durante esta crisis debido a prácticas que sustrajeron recursos de los bancos hacia sus accionistas mayoritarios. Tales prácticas —préstamos a accionistas para comprar empresas, concentración de préstamos y fraude contable— fueron facilitadas por la concentración de poder y los vínculos con el poder político de los bancos locales. Por el contrario, los bancos de propiedad extranjera se desempeñaron relativamente bien durante la crisis gracias a tres factores: (i) importaron tecnologías crediticias desde sus casas matrices, (ii) no formaban parte de grupos empresariales locales con propiedad concentrada, y (iii) eran menos propensos, ex-ante, a recibir un rescate del gobierno. Estos factores continuaron siendo relevantes durante los 1980s, a pesar de que el gobierno había obligado a los bancos extranjeros a convertirse en accionistas minoritarios de sus filiales en 1975.

English Abstract: The resilience of firms to industry-wide shocks has positive externalities in industries with systemic risk, such as banking. We study the resilience of banks to macroeconomic slowdowns in a context of lax microprudential regulations: Colombia during the 1980s. Multiple banks performed poorly during the crisis due to practices that tunneled resources from depositors to shareholders and board members. Such practices —related lending for company acquisitions, loan concentration, and accounting fraud— were enabled by power concentration and links with political power among local banks. In contrast, foreign-owned banks performed relatively well during the crisis due to three factors: (i) foreign-owned banks imported governance institutions and lending procedures from their headquarters, (ii) foreign-owned banks were not part of local business groups with concentrated ownership, and (iii) foreign-owned banks were ex-ante less likely to receive a bailout from the government. These factors continued to be relevant into the 1980s, even though the Colombian government had forced foreign banks to become minority stakeholders of their subsidiaries in 1975.

This is a Spanish translation of: Hernández, C., Caballero-Argáez, C., Tovar, Jorge (2022). “Tunneling when Regulation is Lax: The Colombian Banking Crisis of the 1980s”. Working paper.

Note: Downloadable document is in Spanish.

Keywords: Banca, Fraude, Préstamos relacionados, Crisis financieras, Rescates

JEL Classification: N26, G21, G28, G30, G33

Suggested Citation

Hernandez, Carlos Eduardo and Caballero Argaez, Carlos and Tovar, Jorge, Sustrayendo recursos cuando la regulación es laxa: La crisis bancaria colombiana de los 1980s (Tunneling when Regulation is Lax: The Colombian Banking Crisis of the 1980s) (December 6, 2022). Available at SSRN: https://ssrn.com/abstract=4338188 or http://dx.doi.org/10.2139/ssrn.4338188

Carlos Eduardo Hernandez (Contact Author)

Universidad de los Andes, Colombia - School of Management ( email )

Carrera Primera # 18A-12
Bogotá
Colombia

Carlos Caballero Argaez

Universidad de los Andes, Colombia ( email )

Cra 1 Nº 18A- 12
Bogotá
Spain

Jorge Tovar

Universidad de los Andes, Colombia ( email )

Carrera Primera # 18A-12
Bogota, DC D.C. 110311
Colombia

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