Has Foreign Bank Entry Led to Sounder Banks in Latin America?
6 Pages Posted: 16 Mar 2005
Policymakers continue to debate the merits of opening emerging market financial sectors to foreign ownership. A comparison of the 1995-2000 performance of foreign and domestic banks in select Latin American countries reveals that while foreign banks differed little from their domestic counterparts in overall financial condition, they showed more robust loan growth, a more aggressive response to asset quality deterioration, and a greater ability to absorb losses - characteristics that could help to strengthen the financial systems of their host countries.
Keywords: Latin America, bank, foreign, soundness
JEL Classification: F3, O1, G21
Suggested Citation: Suggested Citation