Macro-Prudential Assessment of Colombian Financial Institutions’ Systemic Importance

C. Machado, A. Murcia, C. León

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Three metrics are designed to assess Colombian financial institutions’ size,
connectedness and non-­substitutability as the main drivers of systemic
importance: (i) centrality as net borrower in the money market network;
(ii) centrality as payments originator in the large-value payment system
network, and (iii) asset value of core financial services. Two systemic importance indexes are calculated based on two different aggregation methods for the
three metrics: fuzzy logic and principal component analysis. The resulting
indexes are complementary and provide a comprehensive relative assessment of each financial institution’s systemic importance in the Colombian case, in which the choice of metrics pursues the macro-­prudential perspective of financial stability. They both (i) agree on the skewed (i.e. inhomogeneous) nature of systemic importance and its approximate scale-­free distribution; (ii) on the preeminence of credit institutions as the main contributors to systemic importance, and (iii) on the non-­‐trivial importance of a few non-­‐banking institutions.
Original languageEnglish
Place of PublicationTilburg
Number of pages46
Publication statusPublished - 23 Jun 2014

Publication series

NameCentER Discussion Paper


  • systemic importance
  • systemic risk
  • fuzzy logic
  • principal component analysis
  • financial stability
  • macro-prudential


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