Because at that time, the prevailing view was that the State should actively intervene to encourage economic development. From this perspective—before fully understanding the costs and risks of such strategies—central banks were expected to direct savings toward strategic sectors through loans granted on preferential terms, aiming to accelerate economic growth.
How did Banco de la República begin its role as a promoter of development in Colombia?
This role began to be formalized with Decree 756 of 1951, which granted the Bank the power to establish special quotas for development credit to different sectors of the economy. Later, in 1963, the Monetary Board assumed responsibility for defining the rediscount funds, their sources of financing, the sectors to be supported, and the financial conditions of the loans.
Related Blog BanRep: The Role of Banco de la República as a development bank
According to the prevailing view in Latin America of the mid-20th century—which saw active state intervention as essential for promoting development—central banks were assigned a significant role as development banks. On this basis, they were expected to direct part of domestic savings under favorable conditions to key productive sectors to boost economic growth...
