Financial Development in Latin America and the Caribbean: Stylized Facts and the Road Ahead

61 Pages Posted: 20 Apr 2016

See all articles by Tatiana Didier

Tatiana Didier

World Bank

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Date Written: August 1, 2013

Abstract

The paper documents the major trends in financial development in Latin America and the Caribbean since the early 1990s. The paper compares trends in Latin America and the Caribbean with those in Asia, Eastern Europe, and advanced countries and compares countries within Latin America and the Caribbean. The findings show that financial systems in the Latin America and the Caribbean region have become more diversified and more complex. In particular, domestic financial systems have become less bank-based, with bond and stock markets playing a larger role; institutional investors have gained some space in channeling domestic savings, thus increasing the availability of funds for investment in capital markets; and several economies in the region have started to reduce currency and maturity mismatches. Nonetheless, a few large companies continue to capture most of the domestic savings. And because these trends have unfolded more slowly than pro-market reformers had envisioned, broad, market-based financial systems with dispersed ownership have yet to materialize fully in the region. As a result, convergence is still largely failing to happen and the region's financial systems remain less developed than those of the advanced economies and several other emerging economies, most notably those in Asia.

Keywords: Debt Markets, Emerging Markets, Banks & Banking Reform, Access to Finance, Mutual Funds

Suggested Citation

Didier, Tatiana and Schmukler, Sergio, Financial Development in Latin America and the Caribbean: Stylized Facts and the Road Ahead (August 1, 2013). World Bank Policy Research Working Paper No. 6582. Available at SSRN: https://ssrn.com/abstract=2316584

Tatiana Didier (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
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(202)458-1525 (Phone)

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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