BOGOTA, Aug 23 (Reuters) - Colombia's banks have called on the country's central bank to tackle liquidity issues amid lower-than-expected government spending and compliance with international regulatory framework Basel III, which strengthens bank risk management. Analysts attribute the financial system's decrease in liquidity to the government's slower budgetary spending and higher tax collection. The funds are stored in the central bank and have not flowed into the economy. Furthermore, banks are required to retain a certain level of reserves under Basel III, adding to the liquidity strain, Asobancaria said. The liquidity needs of banks have seen commercial interest rates rise above the central bank's benchmark rate of 13.25%.

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Persons: Asobancaria, Nelson Bocanegra, Oliver Griffin, Josie Kao Organizations: Basel III, Thomson Locations: BOGOTA, Basel, Colombian