Lender of Last Resort

According to Chapter VI in Colombia’s Constitution, a basic function of Banco de la República is "to serve as a lender of last resort [...] for credit institutions”. In exercising this faculty, the Bank promotes financial stability through a mechanism designed to support solvent credit institutions that anticipate or are dealing currently with temporary liquidity needs.

Pursuant to the provisions in Law 31 of 1992, External Resolution 2 of 2019 compiles and dictates the rules set by the Board of Directors of Banco de la República in exercise of this function. In turn, the various aspects of that resolution are regulated in Banco de la República’s External Regulatory Circular DEFI-360 (and its attachments).