developing a better understanding of credit and its mechanisms. A rapidly growing strand of the literature views banks as facing … funding restrictions that condition their borrowing to a risk-based capital constraint which, in turn, affects bank lending …. This work explores the way banks in Colombia manage their balance sheet and sheds light into the dynamics of credit and …

-econometric evidence of the positive relationship between rapid credit growth and deterioration in lending portfolios: Loans granted during …

lending rates. With this financial friction I show that small changes in the productivity and intermediation costs of banks …

depend on the degree of substitution between deposits and central bank credit as sources of funds for banks and on the extent … to which RR changes affect the risks facing banks. The empirical results for Colombia suggest that RR are important long … deposit and lending interest rates. …

ori- ented towards creating the necessary market conditions for banks to enhance their e±ciency. …