| In this document are presented the results of a research on the causes of the Colombian credit unions' collapse and the establishment of an early warning system (EWS) used by the Superintendencia Bancaria of Colombia and the Fondo de garantia de instituciones financieras (FOGAFIN), the Colombian deposits insurer. Two statistical models are considered: first, a logit model with fixed-effect error decomposition to check for and correct the contagion effect; second, a hazard model, with selection of the better survival function among the exponential, the Weibull and the log-logistic. The hazard model presented here is not the classical proportional hazard model of Cox (72), but a split-population model. This split-population model generates estimates of two variables of interest: (i) the probability of failure, and (ii) the time to failure. This separation is useful for supervisors as they can base their actions on these two criterions. The main conclusion of the study is that credit unions' collapse was mainly founded in the abuses of some managers in the use of member's funds. This means that the supervising authorities should take on preventive measures that permits continuous control of these latter. |
