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Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities in Colombia, 1996-2003

Juan Manuel Lima, Johannes Wiegand (), Enrique Montes-Uribe and Carlos Varela

No 2006/005, IMF Working Papers from International Monetary Fund

Abstract: We employ an extended version of the Allen et al. (2002) Balance Sheet Approach to examine macroeconomic vulnerabilities in Colombia between 1996 and 2003, based on an unusually rich data set. We find that vulnerabilities existing prior to Colombia's 1999 recession-high levels of private debt, a large negative foreign currency position of the corporate sector, and banks' exposure to stretched households and companies-receded subsequently. New vulnerabilities emerged, however, especially the high level of public debt accumulated until end-2003, and growing exposure of the financial sector to the sovereign.

Keywords: WP; bank; bank intermediary; foreign currency; balance sheet; debt; Sectoral Balance Sheet Analysis; Macroeconomic Vulnerabilities; Colombia; foreign currency position; balance sheet contagion; liaibilities in Colombia; emerging market economy; mortgage debt; lending to company; foreign currency assets; Financial statements; Public sector; Corporate sector; Pension spending; East Asia (search for similar items in EconPapers)
Pages: 34
Date: 2006-01-01
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Handle: RePEc:imf:imfwpa:2006/005