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Financial fragilities in Latin America : the 1980s and 1990s (Английский)

In late 1994, several Latin American economies, particularly Mexico and Argentina, experienced sharp reversals of international capital inflows that had characterized the previous four years. The immediate cause of the reversals was the loss of international investor confidence in these countries' ability to defend their exchange rate and in the authorities' ability to service their external debt on a timely basis. Short-term interest rates rose to extraordinarily high levels. Because many borrowers could not afford to service their debts at these high interest rates, the credit quality of domestic banks' loan portfolios deteriorated dramatically, creating concerns about the solvency of the banking systems in these economies. The current crisis has occurred during a period of economic and financial reform in Latin America. After almost a decade of macroeconomic and financial difficulties, since the last part of the 1980s and the beginning of the 1990s, many Latin American countries have undertaken major transformations of their economic structures. These efforts have included not only comprehensive stabilization programs aimed at correcting macroeconomic imbalances but also deep structural reforms designed to improve the efficiency of market mechanisms in pricing and allocating resources among the different sectors of these economies. In addition, the paper analyzes policy issues associated with the long-run health of the financial system: (1) the proper design of policies to respond to large and volatile flows of capital having the complementary objectives of maintaining long-run macroeconomic stability and a healthy financial system; and (2) the effect on bank soundness of increased competition from recent developments in domestic capital markets.

Подробная Информация

  • Автор

    Rojas-Suarez, Liliana; Weisbrod, Steven R.;

  • Дата подготовки документа

    1995/10/01

  • Тип документа

    Публикации

  • Номер отчета

    47587

  • Том

    1

  • Total Volume(s)

    1

  • Страна

    Латинская Америка,

  • Регион

    Латинская Америка и страны Карибского бассейна,

  • Дата раскрытия информации

    2010/05/19

  • Disclosure Status

    Disclosed

  • Название документа

    Financial fragilities in Latin America : the 1980s and 1990s

  • Ключевые слова

    franchise value;banking system;money market mutual fund;resolution of banking crisis;lender of last resort;economic and financial reform;early stage of development;increase in interest rate;open market interest rate;alternative sources of finance;saving and loan association;role of bank;flow of fund;means of payment;legal and accounting;quality of bank;private pension fund;high reserve requirement;world economic;extension of credit;outflow of deposit;systemic bank crisis;domestic policy response;foreign capital flow;domestic financial institution;private sector finance;restrictive monetary policy;amount of fund;financial market structure;sources of fund;domestic financial market;demand for liquidity;commercial paper market;stabilization of price;corporate cash flow;payment of principal;informal financial market;behavior of bank;share of credit;emerging stock market;private sector funds;asset and liability;corporate financial structure;brady bond;domestic banking sector;university and college;real interest rate;corporate finance structure;pension fund asset;balance of payment;domestic equity markets;stock market volatility;weak banking system;availability of bank;short-term interest rate;design of policy;international financial community;domestic capital market;role of police;deposit insurance system;event of default;amount of cash;loan loss provision;private sector activity;access to bank;debt crisis;stock exchange;financial system;commercial bank;bank deposit;industrial country;Financial Sector;corporate bond;speculative attack;credit problem;cash ratio;credit expansion;cash asset;market capitalization;sound bank;capital inflow;Capital Inflows;high ratio;loan workout;capital gain;industrial economy;direct lender;stabilization program;banking regulators;capital flight;exchange rate;equity issue;Exchange Rates;local equity;total credit;corporate sector;supply credit;loan asset;private security;short-term loan;bank supervisor;bank finance;market index;public confidence;loan crisis;equity financing;short-term funds;bank liability;market price;loan contract;bank liabilities;equity price;bank charter;nonperforming loan;perfect substitute;bank data;

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