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Latin America: The Missing Financial Crisis

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  • Porzecanski, Arturo C.

Abstract

The current episode (2007-09) may well be the first time since Latin America gained its independence in the early 1800s that a major economic contraction and financial calamity in the industrialized world has not caused a wave of currency, sovereign debt or banking crises in the region. What explains Latin America's unprecedented resilience in contrast with, for example, Eastern Europe's now-evident financial vulnerability? Here we review the enormous progress made by many governments in Latin America in the past decade to reduce currency mismatches, allow for more flexible exchange-rate regimes, enhance the capitalization, funding and supervision of their banking systems, encourage the development of local capital markets, and implement sounder and more credible monetary and fiscal policies. Evidently, it is not necessary to wait for an improved international financial regulation in order for reform-minded, well-managed countries to reap the most benefits from, and minimize the deleterious impact of market cycles typical of, financial globalization.

Suggested Citation

  • Porzecanski, Arturo C., 2009. "Latin America: The Missing Financial Crisis," MPRA Paper 18780, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18780
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    References listed on IDEAS

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    Cited by:

    1. Birdsall, Nancy & de la Torre, Augusto & Caicedo, Felipe Valencia, 2010. "The Washington consensus : assessing a damaged brand," Policy Research Working Paper Series 5316, The World Bank.
    2. repec:dgr:rugsom:12005-eef is not listed on IDEAS
    3. Heinrich, Gregor, 2011. "Basilea III y la relevancia para la banca de desarrollo en América Latina [Basel III and the relevance for development banks in Latin America]," MPRA Paper 47401, University Library of Munich, Germany.
    4. Tjeerd M. Boonman & Jan P. A. M. Jacobs & Gerard H. Kuper, 2017. "An Early Warning System for currency crises in Argentina and Brazil 1990-2009," EconoQuantum, Revista de Economia y Finanzas, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 14(2), pages 47-68, Julio-Dic.
    5. Boonman, Tjeerd M. & Jacobs, Jan P.A.M. & Kuper, Gerard H., 2012. "The Global Financial Crisis and currency crises in Latin America," Research Report 12005-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).

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    More about this item

    Keywords

    Latin America; financial crisis;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F30 - International Economics - - International Finance - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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