Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324773 
Year of Publication: 
2025
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1659
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
In this paper, we analyze the competition in the Colombian banking sector using bank-level monthly balance sheet information. We estimate the changes in measures of market power due to the exogenous introduction of a liquidity regulation. Our results suggest that introducing a net stable funding ratio increased the Lerner index in the short term, thus signaling a higher exercise of market power. We rationalize these changes in a simple theoretical model that allows us to analyze the tightening of liquidity requirements for banks. Our empirical results are consistent with banks with higher market power in the loan market than in the deposit market.
Subjects: 
Competition
Banking sector
Liquidity regulation
JEL: 
E44
G21
L13
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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