Financial Stability Report - First Half of 2019

Office of the Deputy Technical Governor; Vargas-Herrera, Hernando; Office for Monetary Operations and International Investments; Cardozo-Ortiz, Pamela Andrea; Financial Stability Department; Osorio-Rodríguez, Daniel Esteban; Systemic Risks Section; Mendoza-Gutiérrez, Juan Carlos; Cabrera-Rodríguez, Wilmar-Alexander; Cardozo-Alvarado, Nathali; Cely-Fernández, Jorge Humberto; Gamba-Santamaría, Santiago; Jaulín-Méndez, Oscar Fernando; Lizarazo-Cuellar, Angélica María; Mariño-Montaña, Juan Sebastián; Meneses-González, María Fernanda; Quicazán-Moreno, Carlos Andrés; Segovia-Baquero, Santiago David; Yanquen, Eduardo

Financial Stability Report - First Half of 2019

Report (15.13 MB)

Box 1. Indicator of Additional Probability of Recession (623.95 KB)

Box 2. Aggregate Vulnerability Indicator (565.41 KB)

Box 3. Indicator of Financial Conditions (531.04 KB)

Box 4. The Role of the Supervisor in the Reversal of the Recent Deterioration in the Loan Portfolio (496.94 KB)

Financial Stability Report - First Half of 2019

Date published

2025-05-28

Authors

Office of the Deputy Technical Governor
Vargas-Herrera, Hernando
Office for Monetary Operations and International Investments
Cardozo-Ortiz, Pamela Andrea
Financial Stability Department
Osorio-Rodríguez, Daniel Esteban
Systemic Risks Section
Mendoza-Gutiérrez, Juan Carlos
Cabrera-Rodríguez, Wilmar-Alexander
Cardozo-Alvarado, Nathali
Cely-Fernández, Jorge Humberto
Gamba-Santamaría, Santiago
Jaulín-Méndez, Oscar Fernando
Lizarazo-Cuellar, Angélica María
Mariño-Montaña, Juan Sebastián
Meneses-González, María Fernanda
Quicazán-Moreno, Carlos Andrés
Segovia-Baquero, Santiago David
Yanquen, Eduardo

ISSN

2145 - 650X

Document language

eng

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Las opiniones contenidas en el presente documento son responsabilidad exclusiva de los autores y no comprometen al Banco de la República ni a su Junta Directiva.

The opinions contained in this document are the sole responsibility of the author and do not commit Banco de la República or its Board of Directors.

Description

This Financial Stability Report presents the appreciation of Banco de la República (the Central Bank of Colombia) on the recent performance of credit institutions and their debtors, as well as on the main risks and vulnerabilities that could have some effect on the financial stability of the Colombian economy. The Report intends to inform both participants in financial markets and the general public, besides promoting public debate on the trends and risks that may affect the financial system. The results herein presented also serve the monetary authority as an input in their decision-making to promote financial stability within the general context of the objectives of price stability and macroeconomic stability. 1. The financial system completed the process of adjustment to the macroeconomic shocks that have been observed since 2014: - Credit Risk - Lower profitability than the historical average - Low credit growth 2. The Colombian economy has a resilient financial system. This, together with recent advancements in prudential regulation, make it unlikely that domestic credit conditions may become a source of macroeconomic disturbance. 3. The economic recovery has allowed for: - Lower growth of non-performing loans - Lower growth of risky loans - Recovery of profitability - A trend towards a slight recovery in credit growth 4. The expected widening of the current account deficit of the Colombian economy and the latent risk of lower-than-expected growth for some trading partners pose vulnerabilities that, in the face of negative shocks, could affect the stability of the financial system. 5. Credit risk continues to materialize in sectors such as construction and agriculture; at the same time, its intensity has reduced in housing debt. Box 1. Indicator of Additional Probability of Recession Box 2. Aggregate Vulnerability Indicator Box 3. Indicator of Financial Conditions Box 4. The Role of the Supervisor in the Reversal of the Recent Deterioration in the Loan Portfolio Box 5. An Analysis of Financial Vulnerability using the Heuristic Method Box 6. Foreign Exchange Position and Capital Adequacy Ratio Box 7. Considerations Regarding the Memory of Credit Bureaus