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The seminar was led by Cecilia Cifuentes, Executive Director of CEF; Jaime Munita, Vice Chairman of DCV and General Manager of AFP Capital; José Manuel Mena, Chairman of ABIF; and María Alicia Montes, Chairman of CFA Society Chile.
Centro de Estudios Financieros (CEF), ESE Business School of Universidad de Los Andes and Depósito Central de Valores (DCV) organized the seminar "A Capital Market without Capital," where executives from the financial sector analyzed the actual impacts that the pension funds withdrawals have had in the industry.
In her presentation, Cecilia Cifuentes, Executive Director of Centro de Estudios Financieros (CEF), ESE Business School of Universidad de Los Andes, cautioned about the effect of these public policies on long-term savings, which are crucial to have the necessary resources to satisfy the social demands of Chilean citizens. "The most severe effect of pension funds withdrawals is that we are destroying the capital market, which is one of the development pillars of our country," she added.
Afterwards, Jaime Munita, Vice Chairman of DCV and General Manager of AFP Capital, emphasized that beyond the availability of immediate resources, these withdrawals have a negative effect on people, reflected in lower access to mortgage financing or an increase in inflation rates. "It has also had an impact on State financing policies. For instance, a rise of 100 base points in the average funding rate of the Treasury Department would be approximately 1 billion US dollars, which is equivalent to 10 kilometers of a subway line, more than twice of what was invested in vaccines or the total cost of an eventual reintegration of the Chilean tax system."
In the next panel (moderated by Matías Braun, Head Professor of the ESE Business School, Universidad de Los Andes), José Manuel Mena, Chairman of the Banks and Financial Institutions Association (ABIF), stated that before the withdrawals, Chile was amongst the 15 countries in the world where mortgages were given at 30 years and at a fixed rate. "Banks will continue giving loans, but not under the past conditions. To reach those levels once again, we must develop a plan to re-build long-term savings," he added.
Finally, María Alicia Montes, Chairman of CFA Society Chile, indicated that the capital market has also suffered deterioration due to a higher risk perception from investors. "If we want to attract more investment, both from Chileans and foreigners, we must be clear about the rules of the game. This is how we can give a second wind to the local capital market", she explained.
Images of the seminar
