Description:

As with any central bank, the Banco de la República plays the role of banker of banks. On one hand, it is the depository of the money allocated in fulfilment of the bank reserve requirements, which serve to regulate the credit-issuing capacity of the banking system. This reserve, maintained under the tightest security, backs the liquidity of the banking system. On the other hand, as was mentioned previously, the Banco de la República acts as last resort lender to credit institutions in the event of a temporary lack of liquidity caused by the massive withdrawal of deposits..