Finance and Private Sector Development

closed

Closed

The Financial Sector Development Policy loan Program for Colombia will support sustainable growth and alleviation of poverty by: a) strengthening the financial system to prevent disruptive and costly financial crises; and b) consolidating the securities markets as a pillar of economic growth to address the needs of individuals and the productive sector. The Government of Columbia (GoC) is facing significant macroeconomic challenges from the current global financial crisis, which has resulted in lower capital inflows and increased borrowing costs. Recent growth and poverty reduction in Colombia has been supported by a stable expansion of the financial system, following the financial crisis that Colombia suffered at the end of the 1990s. As the ongoing global crisis impacts Colombia, the GoC is committed to preserving these gains in financial sector development as part of its broader development strategy. This financing will provide support for the two pronged combined approach the government has been implementing to tackle, in the short run, the impact of the international crisis in the Colombian financial sector, while at the same time proceed with the reforms needed to further develop financial markets in the long run. GoC commitment to face these issues and the soundness of the approach as well as the overall impact of these reforms in the Colombian economy underpin the support of this loan. The request of this loan is part of the strategy of the GoC, which has increased its funding from multilateral organizations in the face of a deterioration of the external environment. In May 2009, Colombia obtained US$10.5 billion as a one-year precautionary arrangement under the International Monetary Funds (IMF's) Flexible Credit Line (FCL). Collaboration with other multilaterals is fluid. In particular, World Bank and IMF staff maintains strong coordination and cooperation on both macroeconomic issues as well as financial sector issues.

FY17 - Financial Sector

World Bank Group

Project

Government, Automotive