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Bank laws, economic growth and early banking in Latin America: 1840–1920

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  • Zegarra, Luis Felipe

Abstract

This article examines the impact of legal and economic factors on the growth of commercial banking in Latin America in the 19th and early 20th centuries. Using annual data for five countries for the period 1840–1920, this article shows that growth in exports had a significant effect on the growth of bank liabilities (deposits plus note issues). For the most part, changes in banking laws did not have a significant effect on the development of banking. This latter result likely reflects heterogeneity in the meaning of changes, as well as the potential dominance of de facto political factors in shaping the importance of de jure legal changes.

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  • Zegarra, Luis Felipe, 2014. "Bank laws, economic growth and early banking in Latin America: 1840–1920," Explorations in Economic History, Elsevier, vol. 53(C), pages 101-119.
    • Handle: RePEc:eee:exehis:v:53:y:2014:i:c:p:101-119
    DOI: 10.1016/j.eeh.2014.01.001
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    References listed on IDEAS

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    1. Haber, Stephen H., 1991. "Industrial Concentration and the Capital Markets: A Comparative Study of Brazil, Mexico, and the United States, 1830–1930," The Journal of Economic History, Cambridge University Press, vol. 51(3), pages 559-580, September.
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    3. Peláez, Carlos Manuel, 1975. "The Establishment of Banking Institutions in a Backward Economy: Brazil, 1800–1851," Business History Review, Cambridge University Press, vol. 49(4), pages 446-472, January.
    4. Levine, Ross, 1998. "The Legal Environment, Banks, and Long-Run Economic Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 596-613, August.
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    6. Fry, Maxwell J, 1997. "In Favour of Financial Liberalisation," Economic Journal, Royal Economic Society, vol. 107(442), pages 754-770, May.
    7. Ng, Kenneth, 1988. "Free Banking Laws and Barriers to Entry in Banking, 1838–1860," The Journal of Economic History, Cambridge University Press, vol. 48(4), pages 877-889, December.
    8. Rockoff, Hugh, 1974. "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(2), pages 141-167, May.
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    Cited by:

    1. Zegarra, Luis Felipe, 2017. "Usury laws and private credit in Lima, Peru. Evidence from notarized records," Explorations in Economic History, Elsevier, vol. 65(C), pages 68-93.
    2. Cuevas Casaña, Joaquim & Martín Aceña, Pablo & Pons Brias, María A., 2019. "How local conditions affect global banking: The case of BBVA and Santander," eabh Papers 19-02, The European Association for Banking and Financial History (EABH).

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    More about this item

    Keywords

    Latin America; Banking sector; Bank laws;
    All these keywords.

    JEL classification:

    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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