The Risk-Taking Channel in Colombia Revisited
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.
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- Martha López & Fernando Tenjo & Héctor Zárate, 2011.
"The Risk-Taking Channel and Monetary Transmission Mechanism in Colombia,"
ENSAYOS SOBRE POLÍTICA ECONÓMICA,
BANCO DE LA REPÚBLICA - ESPE, vol. 29(64), pages 211-234, July.
- Martha López & Fernando Tenjo & Héctor Zárate, 2011. "The Risk-Taking Channel and Monetary Transmission Mechanism in Colombia," Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 29(64), pages 211-234.
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"Hazardous Times for Monetary Policy: What Do Twenty‐Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk‐Taking?,"
Econometric Society, vol. 82(2), pages 463-505, 03.
- Gabriel Jiménez & Steven Ongena & José Luis Peydró & Jesús Saurina, 2009. "Hazardous times for monetary policy: What do twenty-three million bank loans say about the effects of monetary policy on credit risk-taking?," Working Papers 0833, Banco de España;Working Papers Homepage.
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"Money in a Theory of Banking,"
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