DOES INTEGRATED SUPERVISION WORK IN EMERGING MARKETS-THE CASE OF BOLIVIA--

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DOES INTEGRATED SUPERVISION WORK IN EMERGING
MARKETS-THE CASE OF BOLIVIA--

• PRESENTATION BY
• Pablo Gottret, Ph.D
• World Bank Senior Economist and Former
  Superintendent of Pensions, Insurance and
  Securities of Bolivia

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OBJECTIVES AND VISION SET FOR THE SUPERINTENDENCY
OF PENSIONS, INSURANCE AND SECURITIES

• OBJECTIVES Promote and control the prudent and
  transparent sustainable growth of the sectors
  under its supervision.
• VISION Institutional investors channeling long
  term internal savings through the capital markets
  to the real sector, infrastructure and services,
  on the basis of risk rated instruments
  (investment grade or better) according to a
  prudent portfolio requirement which generates a
  market rate of return for such savings.

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INSTRUMENTS AND WORK ETHICS

• INSTRUMENTS Organized under 4 pillars
• Regulation Draft and issue (according to
  mandate) appropriate regulation for the capital
  markets, pension and insurance laws.
• Supervision Supervise compliance of regulation
• Information Ensure availability and access to on
  time and accurate information regarding the
  sectors under supervision, market behavior and
  the supervised institutions.
• Education Educate the population regarding the
  different markets and the rights and obligations
  of the different economic agents in those
  markets.
• WORK ETHICS
• Honesty, Transparency, Professionalism and Team
  Work.

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Impact of the Merger on the
Bolivian Capital Market
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MUTUAL FUNDS PORTFOLIO (in US MILLIONS - at
end of each period) Dec-1992 to Dec-2002
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BOLIVIAN STOCK EXCHANGE TRANSACTION RATES OF
RETURN (Fixed Income Securities - 28 day averages
in US) September 2001 to December 2002
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SHAREHOLDERS IN MUTUAL FUNDS (N of INVESTORS -
at end of each period) Dec-1998 to Dec-2002
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VOLUMES TRADED IN THE BOLIVIAN STOCK EXCHANGE
(in US MILLIONS, Period 1998-2002)
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VOLUMES TRADED IN THE BOLIVIAN STOCK EXCHANGE
(in US MILLIONS, Period 1998-2003)
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SECURITIES TRADED IN THE BOLIVIAN STOCK EXCHANGE
(YEAR 2002, percentages)
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CORPORATE BONDS ISSUED
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SECURITIZATIONS ISSUED
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TREASURY BONDS ISSUED
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T-BILLS ISSUED
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Structure and Crisis

• How the new structure helped during the crisis
• Depth of secondary markets for long term
  instruments.
• Supervision of Conglomerates
• Relevance of supervising authority in decision
  making

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UNFINISHED JOB

• Corporate Governance Transparency, auditing and
  internal control systems, minority right
  protection.
• Conflicts of Interest Regulation.
• Property Rights and Registries
• Crowding out and investment abroad.