The Stock Market Needs to Be Deregulated

In Uruguay, we had a golden era in the world of finance, something few mention, but it's crucial to understand. In 1867, when the Montevideo Stock Exchange opened its doors, we were at the forefront in Latin America. Imagine, 34 companies trading while in Buenos Aires barely half a dozen were seen. It was a Uruguayan Wall Street! But, what happened to that splendor?

Today, the reality is different. Our financial market is suffocated by regulations that, instead of protecting, hinder growth.

People seek speculative returns because investing in traditional projects, like a factory or a pizzeria, is no longer as attractive. Conventional investments don't yield enough.

Take the recent case of Conexión Ganadera. They raised USD 400 million, which represents 0.6% of our country's GDP. This shows two clear things:

Investment Demand: Savers are looking for alternatives, there's money floating around waiting to be invested wisely.

Financing Problems: The private sector is being strangled by lack of access to traditional credit, resorting to loans with criminal rates, from 1.5% to 5% monthly.

And what do we have? A supply and demand that don't meet because the market is tied up by regulations that leave it weak and the financial system, more dead than alive.

What Would Happen with Less Regulation?

Think of those USD 400 million going directly to the stock market, turning into shares and negotiable obligations. How many companies would have taken off? How many savers would have enjoyed a more fluid and transparent market? And, most importantly, how many would have avoided the disaster of financial scams. Sure, there are always risks in investment, but a market with fair, not suffocating, regulations would have been a shield against frauds of this magnitude.

Deregulation, the key:

The real lesson from this situation isn't more regulation, friends. It's to review, simplify, and make the current regulatory framework effective.

Simplification: Less bureaucracy, fewer barriers for companies to trade and grow.

Efficient Regulation: Supervision yes, but not killing financial innovation.

Dynamic Market: A market that responds quickly to opportunities, where competition and transparency are the norm.

Uruguay needs to become that financial benchmark it once was. Well-done deregulation isn't going backward; it's moving toward a robust, accessible stock market where entrepreneurship and investment can flourish. We must unchain the excessive regulation and let our entrepreneurial spirit manifest in all its potential.