Implications on Households of Bank's Asset Substitution
In this paper we develop a DSGE model to analyze the welfare implications over households that bank's asset recomposition might have. We model a representative bank that potentially faces liquidity dificulties due to a mismatch between credits issued to firms and deposits supplied by households. This bank has a portfolio consisting of loans and bonds. The results show that positive liquidity shocks, driven by changes in the household preferences, affect the bank's asset allocation decisions and are beneficial to households. Similarly, when the bond's return rate increases, there is a substitution effect that lowers the loan to bond ratio, but despite this, the bank's intermediation activity increases inducing a positive effect over the household's welfare.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (57-1) 3431111
Fax: (57-1) 2841686
Web page: http://www.banrep.gov.co/publicaciones/pub_es_fin.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Diaz-Gimenez, Javier & Prescott, Edward C. & Fitzgerald, Terry & Alvarez, Fernando, 1992.
"Banking in computable general equilibrium economies,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 16(3-4), pages 533-559.
- Javier Diaz-Gimenez & Edward C. Prescott & Terry Fitzgerald & Fernando Alvarez, 1992. "Banking in computable general equilibrium economies," Staff Report 153, Federal Reserve Bank of Minneapolis.
- Adriana María Corredor-Waldron & David Pérez-Reyna, . "El mercado de crédito comercial y las restricciones de endeudamiento en Colombia," Temas de Estabilidad Financiera 042, Banco de la Republica de Colombia.
- Agustín Saade Ospina & David Pérez-Reyna, . "Cambios en los incentivos de los bancos como consecuencia de modificaciones en los esquemas de encaje," Temas de Estabilidad Financiera 041, Banco de la Republica de Colombia.
When requesting a correction, please mention this item's handle: RePEc:bdr:temest:053. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Edna Carolina Rubio Molina)
If references are entirely missing, you can add them using this form.