SUERF Policy Brief
by Carola Müller, Matias Ossandon Busch, Miguel Sarmiento & Freddy Pinzon-Puerto
This policy brief examines how redemption shocks in investment funds can transmit to bank lending conditions through the withdrawal of wholesale deposits. Using granular Colombian data during the COVID-19 turmoil, we quantify funding losses and their impact on loan maturities, volumes, and rates. Results highlight the bank–fund nexus as a channel of systemic risk, with central bank liquidity facilities playing a key mitigating role.