Financial Development in Latin America and the Caribbean: The Road Ahead

275 Pages Posted: 16 May 2012

See all articles by Augusto de la Torre

Augusto de la Torre

Columbia University, School of International & Public Affairs (SIPA), Students

Alain Ize

World Bank

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Date Written: May 1, 2012

Abstract

During the 1980s and 1990s, the financial sector was the Achilles heel of Latin America and the Caribbean (LAC). Since then, LAC’s financial systems have continued to gain in soundness, depth and diversity, becoming more integrated and competitive, with new actors, markets, and instruments springing up, and financial inclusion broadening. For all the gains, however, many challenges remain. There is still a nagging contrast between the intensity of financial sector reforms that LAC implemented since the early 1990s and the actual size and depth of LAC’s financial systems. For example, bank credit has stagnated and only few firms actively use equity and bond markets. This study takes an in-depth stock-taking of LAC’s financial systems and a forward-looking assessment of the region’s financial development issues. Rather than going in detail into sector-specific issues, the study focuses on the main architectural issues, overall perspectives, and interconnections inherent to globalized financial systems. The value added of the study thus hinges on its holistic view of the development process, its broad coverage of the financial services industry (not just the banking sector), its emphasis on benchmarking, its systemic perspective, and its explicit effort to incorporate the lessons from the 2008-09 global financial crisis.

Suggested Citation

de la Torre, Augusto and Ize, Alain and Schmukler, Sergio, Financial Development in Latin America and the Caribbean: The Road Ahead (May 1, 2012). World Bank Latin American and Caribbean Studies, 2012. Available at SSRN: https://ssrn.com/abstract=2061049

Augusto De la Torre (Contact Author)

Columbia University, School of International & Public Affairs (SIPA), Students ( email )

420 West 118th Street
New York, NY
United States

Alain Ize

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

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