Credit Stagnation in Latin America

49 Pages Posted: 22 Apr 2002

See all articles by Adolfo Barajas

Adolfo Barajas

International Monetary Fund (IMF) - Western Hemisphere Department

Roberto Steiner

Universidad de los Andes, Colombia - Department of Economics

Date Written: March 2002

Abstract

This paper examines the recent marked slowdown in bank credit to the private sector in Latin America. Based on the study of eight countries (Argentina, Bolivia, Brazil, Chile, Colombia, Peru, Mexico, and Venezuela), the magnitude of the slowdown is documented, comparing it to historical behavior and to slowdown episodes in other regions of the world. Second, changes in bank balance sheets are examined, investigating whether the credit slowdown is merely a reflection of a slowdown in bank deposits, or whether the asset side has changed. Third, following an econometric disequilibrium approach used in recent studies of credit slowdowns in East Asia and Finland, the paper investigates possible causes for the slowdown in three countries: Colombia, Mexico, and Peru. While both supply and demand factors appear to have played key roles, their relative importance has varied across the three countries.

Keywords: credit, banking system, Latin America, monetary policy

JEL Classification: G21

Suggested Citation

Barajas, Adolfo and Steiner, Roberto, Credit Stagnation in Latin America (March 2002). IMF Working Paper No. 02/53. Available at SSRN: https://ssrn.com/abstract=306522 or http://dx.doi.org/10.2139/ssrn.306522

Adolfo Barajas

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-4152 (Phone)
202-623-6070 (Fax)

Roberto Steiner (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia
+571 341 2240 (Phone)
+571 281 5771 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
219
Abstract Views
1,787
rank
141,743
PlumX Metrics