The Development of Latin-American Bond Markets. Registration Form

Transcription

1 Latin American Research Network The Development of Latin-American Bond Markets Registration Form 1. Name of institution: FEDESARROLLO 2. Name of the participants: Project Director: Marcela Meléndez Researcher 1: Natalia Salazar Researcher 2: Researcher 3: 3. Name, title, phone number and of the person responsible for signing the letter of agreement with the Bank: Name: Mauricio Cárdenas Title: Executive Director of Fedesarrollo Phone Number: (571) Fax: (571) Does the proposal include the following? (Please check in the appropriate space): A description of the strategy to be adopted. Proposals should enumerate the specific issues that will be analyzed, the methodology used, and an explanation of why the topic is important for the country whose market is studied. Proposals should also include a description of the contribution of the paper in terms of originality in the academic literature and the policy relevance of the hypotheses tested: X A detailed description of the data collection strategy to be used by the research team: X Evidence that the team will be able to collect the data for the descriptive section: X Inclusion of a survey, and evidence of the research team s ability to conduct this survey: X Curriculum vitae of the researchers (3 pages. maximum):x A list of dissemination activities: X Detailed outline of the budget indicating the time and resources that will be used within the context of a research work plan: X 1

2 THE DEVELOPMENT OF LATIN-AMERICAN BOND MARKETS: THE CASE OF COLOMBIA RESEARCH PROPOSAL PRESENTED BY FEDESARROLLO TO THE LATIN AMERICAN RESEARCH NETWORK 1. INTRODUCTION At the beginning of the nineties Colombia underwent a series of major policy reforms aimed at facilitating the development of a bond market, which at the time was practically inexistent. The result two decades later is a bond market that has developed unevenly, with a thriving government bond market, and a private bond market that remains far from consolidation, concentrated on a small number of large suppliers, and exhibiting momentary growth spurs that are not sustained over time. In consequence, in Colombia to date bank credit remains the main source of external financing for firms. There have been several efforts aimed at explaining the lagging performance of market-based financing in Colombia. None of them, however, has focused explicitly on the bond market, so questions regarding this specific market remain unanswered. Also, the empirical approach to the capital market has been descriptive and no intent to model market participant behavior has been pursued. From a policy point of view, it seems timely to contribute to the understanding of whether the development of a private bond market is key for economic growth and development. If it is, measures need to be taken in order to provide the appropriate incentives that have obviously been lacking in the past. In addressing the issue of the development of the bond market in Colombia we propose to follow a microeconomic analytical approach to elicit the variables that drive the decision of a firm to issue bonds, and the decision of an investor to acquire them. Also, the micro approach will allow us to learn about the impact of alternative financing sources on firm performance, an issue that needs to be addressed in considering the desirability of a well-developed corporate bond market. This in no way implies we will be disregarding the macroeconomic and institutional context in which the bond market operates. A point we want to highlight before going on, is that data to characterize the workings of the bond market are available but disperse, and so a workable database will have to be constructed by combining different sources of information. 2

3 This proposal is organized as follows. Section 2 presents the research team. Section 3 provides a brief review of the related literature. Section 4 presents the detail of the methodological approach we propose to address the question posed by the terms of reference. Section 5 presents the data available. Section 6 describes the proposed dissemination activities. Section 7 contains the proposed budget. CVs of the researchers are attached. 2. RESEARCH TEAM Fedesarrollo is Colombia s premier policy oriented research center, with a vast experience in academic production. For the purposes of this project we have teamed up a staff of academic excellence and ample research experience, taking care of balancing different areas of expertise. Marcela Meléndez has a Ph.D. degree in Economics from Yale University. Her expertise is in the field of applied microeconomics. She has ample experience working with firm level survey data. Her research interests are in the areas of industrial organization and regulation, and a major part of her recent research has focused on unveiling how productive units make choices in response to public policy, regulation, or other endogenous and exogenous forces. She is currently Deputy Director and Research Associate at Fedesarrollo. As project director, Marcela Meléndez will be in charge of guiding the empirical approach. She will be both, leading and directly performing research activities. Natalia Salazar has a degree in Economics from Universidad de los Andes. She has ample research and practical experience in issues related to the workings of the financial sector of Colombia and she is widely recognized as one of the Colombian economists with expertise in the field. She has recently studied in detail the firms choice to participate in the capital markets, using micro data, and she is interested in extending this line of research. She is currently Vice-President of the National Association of Financial institutions (Anif). In this project, as senior researcher, Natalia Salazar will be contributing both her research skills and her practical knowledge of the financial markets and of the workings of the Colombian economy. 3. REVIEW OF RELATED LITERATURE Literature addressing the issue of bond market development is not very extensive, and the most salient efforts are dedicated to explain the market s development level a multi-country panel regression setting. 3

4 Eichengreen and Luengnaruemitchai (2004) study the causes for the slow development of Asian bond market, taking into account its multiple dimensions. Using a cross-section of developing and developed economies that acknowledges the historical, structural, institutional, and macroeconomic determinants of bond market development, the authors find that the region's structural characteristics and macroeconomic and financial policies account importantly for differences in bond market development between Asia and the rest of the world. Zervos (2004) documents the precise costs of debt and equity issuance, both domestically and internationally, for firms in Brazil, Chile and Mexico. Through an extensive recollection of data and interviews, the components of issuing costs for corporate debt and equity domestically and abroad are calculated, including investment banking and legal fees, regulatory and exchange listing costs, taxes, rating agency fees, and expenditures for marketing and publishing. The work highlights specific features of the demand and supply for bonds, that have an impact on both the costs of issuance and the nature of the debt and equity markets in the aggregate, and provides insight for the development of primary markets in these countries. Beck and Levine (2002) study whether market-based or bank-based financial systems are better at financing the expansion of industries that depend heavily on external finance, at facilitating the formation of new establishments and at improving the efficiency of capital allocation across industries. They find that while legal system efficiency and overall financial development boost industry growth, new establishment formation, and efficient capital allocation, having a bank-based or market-based system per se does not seem to matter much. Levine (2002) also analyzes differences between bank-based and market-based economies. Through the first broad crosscountry examination, Levine explores which view of financial structure is more consistent with the data. His results indicate that although overall financial development is robustly linked with economic growth, there is no support for either the bank-based or market-based view. Faulkender and Petersen (2003) examine how firms choose their capital structure. They combine the literature on optimal choice of leverage with the literature on credit constraints to explain the observed patterns of leverage in publicly traded firms, contributing to the debate of whether firms are under-levered. Using an econometric approach over a sample of publicly traded firms for the period , they find evidence that even large firms capital structure decisions are constrained by the capital markets. Even after controlling for the firm characteristics previously found to determine observed capital structure, and the possible endogeneity of having a bond rating, they find that firms which are able to raise debt from public markets have 40 percent more debt. 4

5 For the particular case of Colombia, literature has been focused on the capital markets in general, but not in particular on the bond market. Fedesarrollo (1996) led an umbrella project to investigate the obstacles facing the development of the capital market from different angles, including institutional and regulatory restrictions, potential suppliers and market participants, and structural macroeconomic determinants. The result of this study, known as the Capital Market Mission, is a set of policy recommendations. In particular, the Mission led the way for the development of a government bond market and proposed specific modifications to the regulation ruling the behavior of the institutional investors. It also contributed to the design of the institutions nowadays governing the capital markets in Colombia. More recently, Anif-Fedesarrollo (2004) studied the financial structure of the entrepreneurial sector in an effort to understand its reticence to participate in the capital markets. Using input from interviews, workshops, and a survey, this study found that the market is still very concentrated in short term securities, that big firms tend to participate more, and that, in general, the capital market is under-used. Curiously enough, the diagnosis from the point of view of both firms and institutional investors is not far from that provided by the Capital Market Mission almost a decade before. The study concludes with a series of recommendations to deepen the market. 4. METHODOLOGY PROPOSED The Terms of Reference for this round of research pose four broad questions that need to be answered. In this section we briefly expose how we propose to address each of them. A. Evaluation of the level of development of the Colombian bond market In order to assess the level of development of the Colombian bond market, we propose a descriptive approach. Using the data available we will construct different absolute and relative size measures that will allow us to compare the Colombian bond market not only to that of similar countries, but to the level of development of other local markets. We will look both at level indicators and at rates of change over time in order to identify possible development lags. We will also develop measures of the market s potential for growth, by directly considering the supply and demand for bonds. In addressing this first question we will look at the Colombian bond market considering both its public and private components, the latter further broken into financial and non-financial suppliers. In what follows, however, focus will be on the private bond market, and the supply and demand for 5

6 bonds issued by non-financial players. The government bond market and the financial institutions role as private bond suppliers will be considered only inasmuch as their performance is connected to that of the private bond market that will be at the center of this research. This choice of focus responds to our perception that in the case of Colombia the research questions posed apply in particular to this specific market within the larger bond market in which the government and the financial institutions also participate as suppliers. B. Identification of the main determinants of the current situation As stated above, we propose to focus on the private bond market in which the suppliers are nonfinancial institutions. In order to identify the main determinants of the current state of development of this market, we propose to follow a threefold approach: (1) Time series model to explain the development level of the bond market. Using the available data, we propose to estimate a time series econometric model in order to learn about the variables that are able to explain the market s development level. We envision a model that will have a measure of the performance of the market on the left hand side (such as the amount of bond debt outstanding at each moment in time) and a series of explanatory variables on the right hand side, falling in the following categories: Macroeconomic variables: inflation, real GDP growth, exchange rate, interest rate, market liquidity measures. Institutional / Rules of play variables: capital controls regime, exchange rate regime, monetary regime, tax policy instability, bankruptcy regulation, measures of capital market liberalization, measures of trade openness. Firm characteristics: number of firms by size, number of firms by type of ownership, number of firms by sector, number of firms by age. Market participants characteristics: measures of size and quality of the government local bond debt, banking sector development measures, market participants by type, market participants by size, pension funds entry dummy. Data available from the Financial Accounts of the Central Bank will allow us to put together a database from 1977 to 2003 with bond market performance information. Government debt data are available through the Central Bank of Colombia and the Public Credit Unit at the Ministry of Finance. Firm characteristics data for the manufacturing sector are available from the Annual Manufacturing Survey from the National Statistics Department, DANE. 6

7 In addition, we propose to place a survey to potential bond-issuers, and another to potential bondpurchasers in order to capture the sort of information that is not evident from the observable data. These surveys, which we describe in more detail in what follows, will provide the criteria to guide the selection of additional explanatory variables. This exercise, inspired in work done by others in a multi-country framework, provides a first general look at the variables that explain the outcomes observed in the Colombian private bond market during the twenty-five years period for which data are available. To our knowledge, this type of exercise has not ever been done in the proposed level of detail for Colombia. (2) Probit model to explain the firms decision to issue bonds. As a second step we propose to go one step further and explore what drives the decision of a nonfinancial firm to issue bonds. From the data available at the Superintendencia de Valores we can identify the non-financial firms that have issued bonds between 1991 and We can cross this information with the firm level information available at the Superintendencia de Sociedades and identify the particular characteristics of these firms (size, profitability, sector, and other). Using this information, we propose to select a sample of firms of similar characteristics who have not participated as suppliers in the bond market. The sample composed both by the firms who have issued bonds and the firms of similar characteristics who have not, will be used to estimate a probit regression to explain the decision to participate in the bond market. It will also be the object of a survey placed by Fedesarrollo to capture what is not available from the data: their perception about the bond market and the banking sector as financing sources. The independent variables in the probit regression will be firm characteristics, market characteristics, macroeconomic controls, and other variables unknown ex-ante, identifiable with the survey we propose to apply. For the survey we propose to apply, we will rely on Fedesarrollo s ample experience in survey design, application and processing. Fedesarrollo is well known for its monthly Entrepreneurial Opinion Survey applied since 1980 on a representative sample of firms from the industrial and retail sectors, and for its yearly Social Survey applied since 1999 on a representative household sample. Also, starting in May 2005, Fedesarrollo will be conducting a periodic survey for investors, the Financial Opinion Survey which is a project in association with the Bolsa de Valores de Colombia. Researchers at Fedesarrollo are welcome to include special question modules in any of these Surveys, when this is desirable for their projects, or to use the expertise of the professionals 7

8 in charge of these surveys in order to apply surveys to representative samples tailored to meet the information needs of their projects. Of particular interest for this project, Fedesarrollo included in 1995 and 2003 a special module on firm access to capital markets in its Entrepreneurial Opinion Survey. Also in 1995, 2000, 2001, 2002 and 2004 a special question module asking firms about their financial structure was added to this survey. The data collected at these times is available and provides a general diagnose of firm s perception of the capital market. What we propose is to use this initial diagnose as point of departure to design a survey that will go further in exploring issues specifically related to the bond market, such as asymmetric information issues, entry costs, relative costs of the alternative ways of financing (bond market versus banking credit), tax incentives and other. The choice to select the sample in a way such that we will be focusing on firms of similar characteristics that make different decisions with regards to their participation in the bond market, differentiates the exercise we propose from previous empirical approaches that have contributed to identify the main characteristics of firms who issue bonds, but have not gone further to explore what drives the different behavior of firms otherwise similar. (3) Probit model to explain the institutional investors decision to buy bonds issued by nonfinancial players. Here again we will take advantage of Fedesarrollo s expertise with surveys. We propose to place a survey to reach both the actual and potential institutional investors in order to assess what drives their decision to include local corporate bonds in their portfolios. Our survey will take the form of a one-time additional question module to Fedesarrollo s Financial Opinion Survey, mentioned above, and will be applied to the sample jointly designed by Fedesarrollo and Bolsa de Valores de Colombia for it 1. Information gathered from the survey to institutional investors will be used to guide the choice of variables to be included in the estimation of a probit model to explain the investor s decision to purchase corporate bonds in the local market. Data for this exercise will be obtained from that available at Superintendencia de Valores, and Superintendencia de Sociedades. 1 The sample includes 16 banks, 6 Pension Funds, 10 Insurance companies, 8 market intermediaries and 16 Mutual and Trust Funds. 8

9 C. Analysis of the convenience of a bigger bond market Focus will be maintained on the private corporate bond market. The convenience of having a larger market will be assessed by addressing the following two questions: (1) What is the impact of deb t composition on firm performance? Does it make a difference for firm performance whether the firm obtains financing through the bond market of through the banking sector? If debt composition is found to be irrelevant for firm performance, this would be an element to rate the importance of having a large bond market. We propose to answer this question empirically using the firm level database from Superintendencia de Sociedades that allows us to identify each firm s debt structure at each point in time (and other firm characteristics), to estimate a panel regression. As dependent variable we would be using a measure of firm performance. Explanatory variables would be firm level characteristics, sector level variables and macroeconomic performance controls. (2) What is the impact of the corporate bond market on the performance of the banking sector? A finding that bond market performance is not directly related to banking sector performance during periods of banking crises would imply that it is desirable for macroeconomic stability to have a large corporate bond market. We propose to address this question empirically in a panel regression framework. The dependent variable in this model would be a measure of the performance of loans per sector at each point in time, and on the right hand-side among other variables we would have the amount of corporate bond debt outstanding per sector, interacted with a banking crises dummy variable. Data for this exercise would be obtained from two sources, the Superintendecia de Valores, and the Public Credit Bureau at the Superintendencia Bancaria. D. Actions proposed to promote the development of the bond market We understand this as our concluding chapter. Policy recommendations will follow from the answers we arrive to, for the questions addressed in development of the project. 9

10 5. DATA AVAILABLE Aside from the survey data to be collected, and information from interviews with some of the large players from which we will gain a global view of the bond market, we will use the data available from the following sources: Superintendencia de Valores (Supervalores) Detailed data on primary bond issuance, including amount, interest rate, term, and other bond characteristics, as well as issuer, and buyers. Available from 1991 to Bolsa de Valores de Colombia Detailed data on secondary bond issuance, including amounts outstanding and interest rates implicit at specific points in time. Available from 2001 to Data for previous years would require the consolidation of the records kept by Bolsa de Valores de Bogotá, Bolsa de Valores de Medellín and Bolsa de Valores de Occidente, later merged to form the present Bolsa de Valores de Colombia. Superintendencia de Sociedades (Supersociedades) Detailed firm-level accounting data. Balance sheets and income statements are publicly available. Annexes to Balance sheets and Income statements are protected by the Law of Statistical Reserve and available to researchers only in their facilities, upon formal request. Data are available in magnetic form from 1995 to Data for previous years are available in print. Central Bank of Colombia (Banco de la República) Detailed data on government bond issuance, including amount, interest rate and other bond characteristics is available from 1998 to Aggregate data on positions in bonds by type of bond issuer and investor is available from 1990 to 2004 from the National Financial Accounts (Cuentas Financieras). Public Credit Unit, Ministry of Finance of Colombia (Dirección de Crédito Público) Detailed data on government bond issuance, including amount, interest rate and other bond characteristics is available from 1998 to Superintendencia Bancaria (Public Credit Bureau) Detailed data on banking loans per sector, including amounts, and credit ratings. Available from 1995 to

11 Annual Manufacturing Survey (DANE) Detailed firm-level data for the manufacturing sector. Available from 1977 to DISSEMINATION ACTIVITIES The results of our work will be published as a Fedesarrollo working paper, and will be available on the web ( A summary of the main results will be published in Carta Financiera, the magazine of the Association of Financial Institutions (ANIF), which is targeted towards private sector entrepreneurs and financial institutions. We will also hold presentations in academic seminars both local (such as the Fedesarollo seminar or the CEDE seminar at Universidad de los Andes) and/or international (such as the LACEA and Econometric Society meetings), and we will send the paper for publication to a local and/or international journal. 7. BUDGET Hours Total USD Marcela Meléndez (Director and Senior researcher) Natalia Salazar (Senior Researcher) Camila Aguilar (Junior Researcher) Overhead Fedesarrollo Subtotal Survey Survey Total

12 BIBLIOGRAFÍA Anif-Fedesarrollo (2004), Colombia: diagnóstico de la estructura de financiamiento del sector real e identificación de obstáculos que han impedido que estas empresas acudan al mercado de valores, Mimeo. Beck, T. and R. Levine (2002), Industry growth and capital allocation: Does having a market or bank-based system matter?, NBER Working Paper 8982 Eichengreen, B. and P. Luengnaruemitchai (2004) "Why Doesn't Asia Have Bigger Bond Markets?", NBER Working Paper Faulkender, M. and M. A. Petersen (2003) Does the source of capital affect capital structure?, NBER Working Paper 9930 Fedesarrollo (1996), Misión de estudios del Mercado de Capitales, Informe Final. Levine, R. (2002), Bank-based or market-based financial systems: which is better?, NBER Working Paper 9138 Zervos, S. (2004) "The Transactions Costs of Primary Market Issuance: The Case of Brazil, Chile, and Mexico," World Bank Policy Research Working Paper No

13 CURRICULUM VITAES OF RESEARCHERS: MARCELA MELÉNDEZ FEDESARROLLO Calle 78 # 9-91, Bogotá, Colombia Tel.: (571) , ext. 310 Fax: (571) mmelendez@fedesarrollo.org.co EDUCATION Yale University, New Haven, CT, U.S.A. Ph.D. (May 2002) in Economics M.Phil. (May 1999), M.A. (May 1997) in Economics M.A. (May 1994) in International and Development Economics Yale School of Management, New Haven, CT, U.S.A. M.B.A. (December 1996) Universidad de los Andes, Bogotá, Colombia B.A in Economics (March 1990) ACADEMIC EXPERIENCE FEDESARROLLO, Bogotá, Colombia Deputy Director (2004 present) Universidad de los Andes, Department of Economics - CEDE, Bogotá, Colombia Assistant Professor ( ) Yale University, Department of Economics, New Haven, CT, U.S.A. Teaching Fellow, Introductory Microeconomics ( ) FEDESARROLLO, Bogotá, Colombia Researcher (1996) HONORS Yale University Dissertation Fellowship, Spring 2000 Yale University Tuition Fellowship, Graduate Scholarship, Instituto Colombiano para el Desarrollo de la Ciencia y la Tecnología (COLCIENCIAS), Graduate Scholarship, Central Bank of Colombia, PAPERS AND RESEARCH PROJECTS Subsidies to public services and their impact on housing prices, in progress (with Andrés Gómez-Lobo). Evaluation of the Andean trade agreement for the automobile sector, in progress (with Ricardo Paredes). Project for the Ministry of Trade of Colombia. The Colombian transport infrastructure sector, in progress (with Mauricio Cárdenas and Alejandro Gaviria). Project for the Cámara Colombiana de Infraestructura, CCI. Intellectual property rights protection for pharmaceuticals, (with Juan Pablo Uribe, Gabriel Carrasquilla and Emilio Archila). Project for the Ministry of Trade of Colombia. Market structure and price-cost margins in the cement industry Case of Boyacá and Casanare. Study to support testimony in antitrust case. Evaluation of the impact of the FTA between Colombia and U.S.A. on the Valle del Cauca region, Consulting project for Cámara de Comercio de Cali. 13

14 Evaluation of the impact of the FTA between Colombia and U.S.A. on the Bogotá- Cundinamarca region, (with Mauricio Cárdenas, Mauricio Reina, Cristina Gamboa and Ramiro Guerrero). Consulting project for Cámara de Comercio de Bogotá. Social and Economic Impact of the FTA Colombia-U.S.A, (with Mauricio Cárdenas). Project for the Ministry of Trade of Colombia. In charge of chapter Impact of free trade on productivity. Provision of infrastructure services to marginal and not inter-connected areas, (with Mauricio Cárdenas). Study for the Mission of Public Services of Fedesarrollo. Subsidies in the Provision of Energy, Water and Telecommunication Services. Study for the Mission of Public Services of Fedesarrollo. Tools for Industrial Reconversion in Contexts of Structural Change, (with Ricardo Paredes). Consulting project for the USAID. Market Power in the Cajas de Compensación Market in Colombia. Consulting project for the Inter American Development Bank. Market Failures in the Micro, Small and Medium Enterprise Markets in Colombia. Consulting project for the World Bank. Productivity Dynamics of the Colombian Manufacturing Sector, (with Pablo Medina and Katja Seim). Project funded by the IADB Latin American Research Network. Productivity Dynamics in the Food Sector (with Pablo Medina and Diana Kassem). Study of the Application of Environmental Management in Sectoral Policies Cases of Colombia and Bolivia (with Eduardo Uribe). CEDE Working Paper No (Case of Colombia). A Dynamic Model of Vertical Integration for the American Pulp and Paper Industry. Mimeo, Yale University. CEDE Working Paper No CASE STUDIES WRITTEN The Road Concession Contract Tobía Grande Puerto Salgar The Port of Cartagena COURSES TAUGHT Industrial Organization Microeconomics Regulation of Infrastructure Services OTHER ACADEMIC ACTIVITIES Secretary (alternate) of the Latin American and Caribbean Economic Association, LACEA ( ) Member of the editorial committee of Ensayos Sobre Política Económica (ESPE), journal of the Central Bank of Colombia (since 2003) Member of the Latin American Universities Regulation and Infrastructure Network (LAURIN) Academic Coordinator of the Executive Course Design and Management of Transport Concessions, offered by the Department of Economics at Universidad de los Andes OTHER PROFESSIONAL EXPERIENCE Ministry of Justice, Bogotá, Colombia Head, Planning Office ( ) National Finance and Fiscal Council (CONFIS), Ministry of Finance, Bogotá, Colombia Junior Economist ( ) 14

15 NATALIA SALAZAR FERRO Vicepresident ANIF, Asociación Nacional de Instituciones Financieras OFFICE ADDRESS, TELEPHONE & ANIF ASOCIACIÓN NACIONAL DE INSTITUCIONES FINANCIERAS Calle 70A # 7 86, Bogotá Colombia Tel: (57) (1) , Fax: (57) (1) nsalazar@anif.com.co EDUCATION: UNIVERSIDAD DE LOS ANDES, Colombia: MA in Economics (in progress) courses completed. UNIVERSIDAD DE LOS ANDES, Colombia: Bachelor of Arts (completed). Major Economics, April LICEO FRANCES LOUIS PASTEUR, Colombia: High-school graduate (completed), June Baccalauréat du Second Degré, Série Mathématiques et Sciences Physiques, June WORK EXPERIENCE ANIF, ASOCIACIÓN NACIONAL DE INSTITUCIONES FINANCIERAS - (NATIONAL ASSOCIATION OF FINANCIAL INSTITUTIONS), Vicepresident - Since October ASOCIACIÓN BANCARIA DE COLOMBIA (COLOMBIAN BANKING ASSOCIATION), Economic Vicepresident, August 2002-October DEPARTAMENTO NACIONAL DE PLANEACIÓN (NATIONAL PLANNING DEPARTMENT), Sub-director of Sectoral Studies and Regulation, Macroeconomic Studies Department, April 2001-July CENTRO DE ESTUDIOS SOBRE DESARROLLO ECONÓMICO, CEDE - (CENTER OF STUDIES ON ECONOMIC DEVELOPMENT), UNIVERSIDAD DE LOS ANDES, Researcher, July 2000-March Member of the Editorial Board of the academic journal Desarrollo y Sociedad. DEPARTAMENTO NACIONAL DE PLANEACIÓN (NATIONAL PLANNING DEPARTMENT), Consultant, November 1999-June DEPARTAMENTO NACIONAL DE PLANEACIÓN (NATIONAL PLANNING DEPARTMENT), Head of the Monetary Division and the Financial Sector, Macroeconomic Studies Department, March 1999-October FEDESARROLLO, Researcher, January 1995-February BANCO DE LA REPUBLICA - (CENTRAL BANK OF COLOMBIA) Economic Research Department, Public Finance Sector, Economist, from September 1991 to August UNIVERSIDAD DE LOS ANDES, CEDE (Center of Studies on Economic Development), Research assistant, January 1989-July 1989 and January 1991-September TEACHING EXPERIENCE UNIVERSIDAD DE LOS ANDES Economcs Department. Professor of the Macroeconomics I, semester II Teacher assistant, Monetary Theory and Policy, semester II 1991 and semeste I992. Teacher assistant, Macroeconomics II, semester II 1990 and semester I PUBLICATIONS El Leasing en Colombia: Diagnóstico e Impacto sobre la Inversión y el Crecimiento, joint with María Angélica Arbeláez and Fabio Villegas, Cuadernos de Fedesarrollo, # 13,

16 El Balance Estructural del Gobierno Central en Colombia, joint with Diego Prada, Archivos de Macroeconomía, # 226, June 2003 and also in Coyuntura Económica, March Cómo Atraer más Inversión Extranjera a Colombia?, joint with R. Steiner. Published in S. Montenegro and R. Steiner (eds.) Programa Andino de Competitividad: Propuestas para una Colombia más Competitiva, CAF-CEDE Uniandes - Harvard - Alfaomega, Bogotá, September "A Long Lasting Crawling Peg: Political Determinants of Exchange Rate Policy in Colombia," joint with J. C. Jaramillo and R. Steiner. Published in J. Frieden and E. Stein (eds.) The Currency Game: Exchange Rate Politics in Latin America, John Hopkins University Press for the Inter-American Development Bank, Washington, Also in La Economía Política de la Política Cambiaria, Coyuntura Económica, June 1999 and in Serie Documentos de Trabajo Fedesarrollo, # 11 (in English), La Educación en Colombia: Evolución y Diagnóstico, joint with D. Cerquera and P. Jaramillo, published in Boletines de Divulgación Económica - DNP, #6, Nos Parecemos al Resto del Mundo? El Conflicto Colombiano en el Contexto Internacional, joint with J. C. Echeverry and V. Navas. Published in A. Martínez (ed.) Economía, Crimen y Conflicto, Banco Santander Central Hipano, Universidad de Alcalá and Universidad Nacional de Colombia (2001). Also published in Planeación y Desarrollo, Vol. XXI, # 3 and # 4, 2000, and also in Archivos de Macroeconomía - DNP, #143, "Monetizar la Deuda Pública: Cómo No Se Nos Había Ocurrido Antes?", joint with R. Steiner, in Coyuntura Económica, December La Crisis Financiera y la Experiencia Internacional, joint with C. E. Parra, in Boletines de Divulgación Económica, #1, January "Foreign Investment in Colombia s Financial Sector," joint with A. Barajas and R. Steiner, in Journal of Development Economics, 63, 1, Also published in IMF Working Papers, WP/99/150, November 1999 and also in Documento CEDE, 99-16, Hay un Estancamiento en la Oferta de Crédito?, joint with J. C. Echeverry, in Planeación y Desarrollo, Vol. XXI, # 1 and # 2, 2000, and also in Archivos de Macroeconomía, 118, Interest Spreads in Banking in Colombia, , joint with A. Barajas and R. Steiner, in IMF Staff Papers, vol. 46, # 2, June Interest Spreads in Banking: Costs, Financial Taxation, Market Power and Loan Quality in the Colombian Case, ", joint with R. Steiner and A. Barajas, in IMF Working Paper, WP/110/1998. Perspectivas de la Industria Aseguradora, , joint with S. Zuluaga, in Cuadernos Fedesarrollo, # 3, El Margen de Intermediación Bancaria en Colombia, joint with R. Steiner and A. Barajas, in Coyuntura Económica, 4, Efectos de las Restricciones Legales en las Inversiones de los Inversionistas Institucionales: 16

17 Un Modelo de Simulación, joint with E. Lora, in Memorias Segundo Taller Asobancaria, Colombian Banking Association, El Efecto Tanzi, la Sustitución de Monedas y la Tasa de Inflación Optima en Colombia, in Ensayos sobre Política Económica, 22, Sobre la Naturaleza del Ajuste Fiscal en Colombia, joint with A. Carrasquilla, in Ensayos sobre Política Económica, 21, OTHER RESEARCH Preparación para las Negociaciones Comerciales en el Área de Servicios Financieros: los Establecimientos de Crédito, joint with J. C. Jaramillo. Report prepared by ANIF- Fedesarrollo for the Financial Sector Union Guilds, April Otra mirada al Márgen de Intermediación, joint with C. Castro. A version of this document appeared in the Editorial Section of Revista de Indicadores de Coyuntura - DNP, October de Proyecciones de los Inversionistas Institucionales, , Fedesarrollo. Work carried out for the Superintendence of Securities, Historia Monetaria y Financiera de Colombia, ," Fedesarrollo. Research work carried out for Colciencias, Los Inversionistas Institucionales en Colombia, Chile y Estados Unidos: Algunas Comparaciones, Fedesarrollo. Work carried out for the Study Mission of the Capital Market in Colombia with Eduardo Lora, La Competitividad del Sector Financiero Colombiano, Fedesarrollo, Study carried out for the Ministry of Foreign Trade, Podría Repetirse 1982? Un Análisis de los Riesgos Financieros Macroeconómicos, Fedesarrollo, Study carried out for IFI-Ministry for Development, joint with E. Lora,