The Risk Taking Channel in Colombia Revisited

Serie

• Borradores de economía

Resumen

• Levels of interest rates below historical norms may have enhanced financial instability in developed and developing economies during the 2000's. The risk taking channel of monetary policy transmission is a recent theory that explains the interaction between risk perceptions of the financial system and monetary policy. This paper presents empirical evidence of the risk taking channel of monetary policy using detailed information on consumer and commercial loans from the Colombian banking system. Using probit and duration models we find that the banking system takes on more risk when the level of interest rates are too low. We also find that the response to interest rates is higher in the case of commercial loans.

autores

• López, Martha
• Tenjo, Fernando
• Zárate-Solano, Héctor

fecha de publicación

• 2012-02

Área temática

• E44 - Mercados financieros y macroeconomía
• G21 - Bancos; Instituciones de depósito; Instituciones Microfinancieras; Hipotecas
• L14 - Relaciones de transacción; Contratos y reputación; Redes

Enfoque geográfico

• Colombia  Country
• South America  Continent

Líneas de investigación

• Duration Analysis
• Lending Standards
• Monetary Policy
• Probit Models
• Risk Taking

Identificador de objeto digital (DOI)

• https://doi.org/10.32468/be.690

Issue

• 690