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President Iván Duque appointed Bibiana Taboada and Mauricio Villamizar as new co-directors of this institution. With the departure of Ana Fernanda Maiguashca and Gerardo Hernández, the two members who know the financial system best within the board leave.
With the appointment of Bibiana Taboada and Mauricio Villamizar to the board of the Banco de la República, the powers in the board are seriously inclined on the side of the Government of President Duque.
The departure of Ana Fernanda Maiguashca and Gerardo Hernández was scheduled to complete their cycle at the institution, both co-directors were appointed in the time of former president Juan Manuel Santos: Maiaguashca arrived at the Banco de la República in February 2013 and Hernández in the same month of 2017.
The appointments of Taboada and Villamizar to replace the first two have been well received by some although they have also aroused reservations in various sectors
The noises about the interference of the Duque administration in the Central Bank come, at least, from the change in management, which resulted in the entry of Leonardo Villar, amid the noise and rumors about a possible appointment of Alberto Carrasquilla , Minister of Finance.
Judging by the first meeting of this body in 2021, the independence of the Issuer is not compromised: it was decided to leave interest rates at 1.75% and two of the board members voted to execute another cut to help in the reactivation of the economy; the current value is an all-time low reached after seven cuts made last year. According to analysts, the government of the day reaches out, but is careful not to burn itself.
Now, with the departure of Ana Fernanda and Gerardo Hernández, the two co-directors who know the financial system best within the board leave. It is a big hole, experts warn and some even see this movement as retaliation for what happened in the election of the new manager.
How is the board?
It is the first time in recent history that the majority of the members of the Banco de la República board are appointed by the incumbent president: of the seven members of the collegiate body, five are related to the Government, including Minister Carrasquilla, who presides over this body.
It must be taken into account that Roberto Steiner, appointed to replace Juan Pablo Zárate, is also close to completing his term. Zárate was taken by Carrasquilla to the Ministry of Finance, thinking precisely about future movements within the board.
On the other hand, Arturo José Galindo, also co-director, has already announced that he will leave the Bank and the president will have to designate his successor, as ordered by the Constitution. Galindo took over from José Antonio Ocampo, who was forced to leave the board due to academic commitments.
Carolina Soto continues in the race, appointed by President Santos in July 2018, when the resignation of Adolfo Meissel became effective. At the time, Soto held the position of High Council for the Private Sector and Competitiveness in the last national administration.
It is worth remembering that each co-director is elected, in principle, for a period of four years and can apply for two more periods, that is, a stay of 12 years, in the same way that happens with the manager.
The independence
“In the eighties and later – the world of the Washington consensus – an agenda was implemented for central banks that consists of making them independent of the Government both in the design and implementation of monetary policy, and that they pursue a single objective: price stability keeping inflation under control, regardless of unemployment, “writes Guillermo Maya, professor at the Faculty of Economic Sciences of the National University, in the digital newspaper of the academic institution.
It cannot be forgotten that “the special functions assigned to the Bank include regulating the currency, international exchanges and credit, issuing Colombian legal currency, managing international reserves, being a lender and banker for credit institutions and serving as agent Government prosecutor ”, in the words of the institution itself.
For Wilson Tovar, manager of Economic Investigations of the firm Actions and Values, “the clear and true is that the board has no other reason for concern than maintaining the health of the Colombian economy.”
With the election of Leonardo Villar as manager, the Bank’s institutionality and independence were strengthened, according to analysts, after a turbulent time that was felt since Juan José Echavarría announced that he would not present his name for a new period for family reasons, when there was only spent four years in office, out of 12 possible.
Bruce Mac Master, president of ANDI, said through his Twitter account that “with the two new co-directors comes a new generation of economists to the board. Mauricio Villamizar brings all the technical knowledge of the Bank and Bibiana Taboada brings the vision of those who have worked on issues of overcoming poverty, who will enrich the debate ”. And he added about these economists who “come to a body with a long tradition of technical rigor and well-founded debates, it is always enriching to have different views on the important responsibility of the Bank.”
In turn, Minister Carrasquilla assured that: “For me it has been very satisfactory that in these two and a half years there has been complete harmony between the decisions made within the Government in economic matters and the country’s monetary policy. The harmony within the principle of independence has been total. And that has been especially important in this difficult year. The Bank has taken unprecedented measures, always in harmony with the decisions of the National Government. And hopefully these new co-directors continue that tradition. “
Those who arrive
Independent of being the daughter of one of the people closest to President Duque and the Democratic Center (Alicia Arango, who has already passed through two ministries and is now an ambassador to the UN), Taboada is an economist with knowledge of macroeconomic issues. She is a graduate of the Universidad de los Andes and a master’s degree in economics from the same institution. He also holds a master’s degree in public administration in international development from Harvard Kennedy School, the Bank said in a statement.
“He has specialized in the design, implementation and evaluation of social programs, with experience in managing strategies for poverty reduction, social safety nets and targeting schemes”, the Issuer’s document highlights.
The new co-director was deputy director for the Overcoming of Poverty, in the Department for Social Prosperity; Consultant for the Inter-American Development Bank (IDB), in the Office of Strategic Planning and Development Effectiveness, and the World Bank, in the Education sector for Latin America and the Caribbean.
Although he has no experience within the Bank, he presents a resume with authority in economic matters. Despite his possible “patronage”, he arrives at a very technical and robust institution that must be aligned with rigorous studies in economic matters.
Mauricio Villamizar is known to have worked since 2018 as assistant manager of economic studies at the institution, where he began his career as a student in practice in 2004. He is an economist from the Universidad de los Andes with a doctorate and master’s degree in economics from Georgetown University , according to information from the Central Bank. He is also a member and co-founder of the Red Investigadores de Economía.
Within the Bank, it is considered that to perform in this sub-management it is necessary to have high credentials as an economist. It is one of the strongest and respectful teams not only in Colombia, but in other latitudes. It is not pretentious to say that some members of the FED (Central Bank of the United States) have been surprised by the studies carried out at the Banco de la República. “The quality that Villamizar has on his resume is a very powerful arsenal,” said one analyst who preferred to remain anonymous.
However, with the appointment of Villamizar there remains the sensation of a slump in the management of corporate governance within the institution. The current technical manager, Hernando Vargas, is said to have much more background, experience and knowledge to serve as co-director than the same assistant manager of Economic Studies. Vargas has been one of the hidden candidates that the Banco de la República has and that is why he sounded strong to reach the management in the recent election of Villar.
Despite the composition of the board, there is no major concern in the financial market, or among local analysts, for its decisions or for the possibility that the government wants to influence some members of this important institution.
