Bank Lending, Risk Taking, and the Transmission of Monetary Policy: New Evidence for Colombia

Nidia Reyes (), José Eduardo Gómez G. () and Jair Ojeda-Joya
Authors registered in the RePEc Author Service: Jose Gomez-Gonzalez

No 10970, Borradores de Economia from Banco de la Republica

Abstract: We study the existence of a monetary policy transmission mechanism through banks in Colombia, using monthly banks’ balance sheet data for the period 1996:4 – 2012:12. We obtain results which are consistent with the basic postulates of the bank lending channel (and the risk-taking channel) literature. The impact of short-term interest rates on the growth rate of loans is negative, indicating that increases in these rates lead to reductions in the growth rate of loans. This impact is stronger for consumer loans than for commercial loans. We find important heterogeneity in the monetary policy transmission across banks depending on banks-specific characteristics.

Keywords: Monetary policy transmission; Bank lending channel; Risk taking channel; Colombia (search for similar items in EconPapers)
JEL-codes: E5 E52 E59 G21 (search for similar items in EconPapers)
Pages: 18
Date: 2013-06-17
New Economics Papers: this item is included in nep-ban, nep-cba, nep-fdg, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Bank Lending, Risk Taking, and the Transmission of Monetary Policy: New Evidence for Colombia (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:010970

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