Banco de la República (Colombia)

Banco de la República (Colombia), Colombia's central bank. The second central bank in Latin America (the first was Peru's), it was established in 1923 to serve as a lender to Colombia's commercial banks, to administer its international reserves, to issue its currency, and to serve as the government's banking agent. Since 1951 the bank has played an active role in managing Colombia's money supply and in promoting national economic development through credit facilitation. The institution has gone through three stages in its management of the money supply: the first (1923–1931), under the gold standard; the second (1932–1950), when it gradually gained influence over Colombia's money management; and the third (1950 to the present), when it controlled the money supply.

The historical reasons for the creation of the bank in 1923 were several. Major among them was the fact that Colombia (within Latin America) was one of the nations with the least foreign investment. This situation drove the Colombian government to seek better relations with the financial markets in New York and London. By 1922 it had become clear that Colombia's finances needed expert guidance. This was provided by the Edward Kemmerer Mission (1923), which recommended the creation of the Banco de la República. This, in turn, led to substantial increases in foreign investment from the United States and Great Britain.

During the financial crisis of 1929–1931, the bank took over the management of Colombia's salt and emerald mines, as collateral for its stabilization of the currency and finances. Its nonfinancial roles include the promotion and protection of Colombia's cultural heritage, the establishment of modern research facilities, and the sponsorship of many cultural activities. These include the Museo del Oro (Bogotá), organized in 1939, and the Biblioteca Luis Ángel Arango (named for a former director of the bank), formally founded in 1958, with branches in every major Colombian city.

See alsoBanking: Since 1990 .

BIBLIOGRAPHY

Julie Jones and Warwick Bray, Preconquest Goldsmiths' Work of Colombia in the Museo del Oro, Bogotá (1957).

Adolfo Meisel Roca Et Al., El Banco de la República: Antecedentes, evolución y estructura (1990).

Additional Bibliography

Kemmerer, Edwin Walter, Adolfo Meisel Roca, Alejandro López Mejía, et al. Kemmerer y el Banco de la República: Diarios y documentos. Bogotá: Banco de la República, 1994.

Sánchez, Fabio, ed. Ensayos de historia monetaria y bancaria de Colombia. Bogotá: Tercer Mundo Editores, 1994.

                                          J. LeÓn Helguera