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The biggest risk for the economy is that Santos has now lost too much political capital to get tax reform passed this year.

"The record number of sovereign downgrades in 2016 overwhelmingly reflects weaknesses in emerging markets," says Tony Stringer of Fitch Ratings.

The ratings agency gave a BBB- rating to Corpbanca Colombia's viability rating, as well as its long-term local and foreign currency issuer default ratings (IDR).

Brazilian firms took the brunt of the punishment, with 56 domestic corporates getting hit with downgrades last year.

The downgrades for two of Colombia's largest banks come just weeks after a series of negative ratings actions throughout the nation.

While the plight of Estraval was a disaster of its own making, the rating agency cautions that lax regulation of non-bank financial institutions could give rise to more problems.

The downgrades for Bogotá and Medellín — Colombia's two biggest cities — are the same action Fitch Ratings took against the nation's sovereign rating and state-controlled Ecopetrol in July.

While Ecopetrol's long-term foreign-currency IDR was maintained at BBB, its outlook has changed to negative, and the energy giant's long-term local-currency IDR was downgraded one notch.

Colombia's troubling current account deficit, external debt, and government deficit have led Fitch to assign the country a negative outlook.

Though Bancolombia's recapitalization plan may yield dividends, "Fitch does not expect capitalization to return to levels reported in 2014 during this period."