Allen, Mark, Christoph Rosenberg, Christian Keller, Brad Setser, and Nouriel Roubini (2002): “A Balance Sheet Approach to Financial Crisis,” IMF Working Paper 02/210 (Washington, International Monetary Fund).
Arbelaez, Maria Angélica, Maria Lucia Guerra, and Nouriel Roubini (2004): “Debt Dynamics and Debt Sustainability in Colombia,” in: J. Poterba (ed.) Fiscal Policy, Taxes and Public Debt in Colombia; MIT Press 2004.
Cepeda, Freddy, and Carlos Varela (2002): “Estimación del Efecto Ingreso Sobre los Balances Financieros de los Sectores Público y Privado: 1996–2000,” Borradores de Economía 209 (Bogotá; Banco de la República de Colombia).
Echeverry, Juan Carlos, Leopoldo Fergusson, Roberto Steiner, and Camila Aguilar (2003): “’Dollar debt in Colombian firms: are sinners punished during devaluations?,” Emerging Markets Review, Vol. 4 No. 4, pp. 417–449.
IMF (2005): “Debt-Related Vulnerabilities and Financial Crises: An Application of the Balance Sheet Approach to Emerging Market Countries,” IMF Occasional Paper, forthcoming.
Lima, Juan Manuel, Enrique Montes, Carlos Varela, and Johannes Wiegand (2005): “Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities in Colombia, 1996–2003,” IMF Working Paper, forthcoming.
Martinez Torres, Jorge (2003): “Crédito, Inversión y Apalancamiento de las Empresas en Colombia,” Unpublished Master’s Thesis; Universidad Nacional de Colombia.
Uribe, José Darío, and Hernando Vargas (2002): “Financial Reform, Crisis and Consolidation in Colombia,” Borradores de Economía 204 (Bogotá; Banco de la República de Colombia).
Villar Gómez, Leonardo, David Salamanca Rojas and Andrés Murcia Pabón (2005): “Crédito, Represión Financiera y Flujos de Capitales en Colombia: 1974–2003,” Unpublished Manuscript, Bogotá, Banco de la República de Colombia.
Prepared by Johannes Wiegand (PDR).
Examples include Echeverry et. al. (2002) and Martinez Torres (2003) for the corporate sector; Uribe and Vargas (2002) and Villar et al (2005) for the financial sector; and Cepeda and Varela (2002) and Arbelaez et al (2004) for the public sector.
The recession itself began in the second half of 1998 and ended in early 2000. As the following analysis will show, balance sheets adjusted throughout 2000, however.
The difference between Colombia’ net financial and its net foreign currency position are investments of nonresidents in Colombian equity and in peso–denominated Colombian debt.
The concept of “total financial liabilities of the nonfinancial public sector” is somewhat wider than the concept of “debt of the nonfinancial public sector” used in the context of Colombia’s IMF–supported program. For details, see Lima et al (2005).
The share of debt financing increased to 66 percent in 2000, reflecting the fall in equity valuations during the recession
Echeverry et al (2003) report that dollar debt is held almost exclusively by exporting companies that earn foreign currency.
To a lesser extent cuts in consumer lending.
Regarding the funding based of nonbank financial institutions, at end-2003 two–thirds of their liabilities were with households, a quarter with the public sector, 5 percent with companies, 4 percent with private banks, and 3 percent with nonresidents.
Otherwise, dollarization in Colombia is low, owing to legal restrictions on holding bank deposits in currencies other than the peso. At end-2003, only half a percent of bank deposits owned by domestic residents were denominated in foreign currency
Public debt started to fall at end-2003, however, and has decreased further in 2004.