Financial Development in Latin America and the Caribbean : Stylized Facts and the Road Ahead

The paper documents the major trends in financial development in Latin America and the Caribbean since the early 1990s. The paper compares trends in Latin America and the Caribbean with those in Asia, Eastern Europe, and advanced countries and comp...

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Bibliographic Details
Main Authors:	Didier, Tatiana, Schmukler, Sergio L.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	ACCESS TO BANK ACCESS TO BANKS ACCESS TO CAPITAL ACCESS TO FINANCING ACCOUNTING ACCOUNTING STANDARDS ACCOUNTS RECEIVABLE ASSET CLASSES ASSET POOL ASSET RATIOS BALANCE SHEETS BANK ACCOUNT BANK ASSETS BANK CREDIT BANK DEBT BANK FINANCING BANK LENDING BANK LOANS BANKING SECTOR BANKING SECTORS BANKING SYSTEM BANKING SYSTEMS BENCHMARK YIELD BENCHMARK YIELD CURVE BOND BOND FINANCING BOND ISSUANCE BOND ISSUES BOND MARKET BOND MARKET CAPITALIZATION BOND YIELDS BONDS BROKERAGE BROKERAGE FIRMS CAPITAL MARKET CAPITAL MARKET ACTIVITY CAPITAL MARKET REFORMS CAPITAL MARKET REGULATION CAPITAL MARKETS CAPITAL RAISING CAPITAL REQUIREMENTS CAPITAL-RAISING ACTIVITIES CENTRAL BANK CENTRAL BANKS COLLATERAL COMMERCIAL BANKS COMMERCIAL MORTGAGE COMMERCIAL MORTGAGE-BACKED SECURITIES COMMERCIAL PAPER COMMERCIAL PAPER MARKET CONSUMER CREDIT CONSUMER LOANS CONTRACT LAW CORPORATE BOND CORPORATE BOND MARKETS CORPORATE BONDS CORPORATE GOVERNANCE CORPORATE LAW CREDIT CARD CREDIT CARDS CREDIT HISTORY CREDIT LINES CREDIT MARKET CREDIT PROVIDERS CREDIT PROVISION CREDIT RATINGS CREDIT RISK CREDIT UNIONS CROSS-BORDER FLOWS CURRENCY CURRENCY MISMATCHES DEBT DEBT MATURITY DEGREE OF RISK DEPOSITS DERIVATIVE DERIVATIVE MARKETS DERIVATIVES DERIVATIVES MARKET DEVELOPING COUNTRIES DEVELOPMENT BANK DOMESTIC BOND DOMESTIC BOND MARKETS DOMESTIC BONDS DOMESTIC CURRENCIES DOMESTIC CURRENCY DOMESTIC MARKETS ELECTRONIC MARKET EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS ENABLING ENVIRONMENT ENFORCEMENT OF CONTRACT EQUIPMENT EQUITIES EQUITY FINANCING EQUITY MARKET EQUITY MARKET CAPITALIZATION EQUITY MARKETS EQUITY VALUATIONS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL SECTOR DEVELOPMENT FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL DEFICITS FLOATING EXCHANGE RATE FOREIGN BANKS FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN CURRENCY DEBT FOREIGN EXCHANGE FOREIGN FINANCIAL INSTITUTIONS FOREIGN FINANCING FOREIGN INVESTORS FUTURES GOVERNMENT BONDS GROSS DOMESTIC PRODUCT HIGH-YIELD BONDS HIGH-YIELD CORPORATE BONDS HOUSEHOLD SAVINGS HOUSING FINANCE ILLIQUID MARKETS INFLATION INITIAL PUBLIC OFFERINGS INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTEREST RATE INTEREST RATE DERIVATIVE INTEREST RATE DERIVATIVE MARKETS INTERNATIONAL BANK INTERNATIONAL MARKETS INTERNATIONAL SETTLEMENTS INTERNATIONAL STANDARDS INVESTING INVESTMENT BANKS INVESTMENT BEHAVIOR INVESTOR CONFIDENCE INVESTOR PROTECTION ISSUANCE ISSUANCE OF BONDS LEVY LIQUID SECONDARY MARKETS LIQUIDITY LOCAL CURRENCY LOCAL MARKETS LONG-TERM BOND MARKETS LONG-TERM DEBT MACROECONOMIC VOLATILITY MARKET DISCIPLINE MARKET FOR BOND MARKET LIQUIDITY MARKET PLAYERS MARKET REFORMS MARKET SIZE MATURITIES MATURITY MATURITY MISMATCHES MATURITY STRUCTURE MONETARY POLICIES MONEY MARKETS MORTGAGE MORTGAGE-BACKED SECURITIES MORTGAGES MUTUAL FUNDS OFFSHORE CENTERS OFFSHORE FINANCIAL CENTERS OUTSTANDING AMOUNTS OUTSTANDING LOANS PENSION PENSION FUND PENSION FUND INVESTMENTS PENSION FUND REFORMS PENSION FUNDS PENSION SYSTEM PENSION SYSTEM REFORMS PORTFOLIO PORTFOLIOS PRICE STABILITY PRIMARY MARKET PRIMARY MARKETS PRINCIPAL-AGENT PROBLEMS PRIVATE BOND PRIVATE BONDS PRIVATE SECTOR CREDIT PROFIT MARGIN PROTECTION OF MINORITY SHAREHOLDERS PUBLIC BANKS PUBLIC DEBT PUBLIC SECTOR BOND RETURN RETURN ON ASSETS RETURNS SECONDARY BOND MARKETS SECONDARY MARKETS SECURITIES SHAREHOLDER SHAREHOLDERS STOCK EXCHANGE STOCK EXCHANGES STOCK MARKETS STOCKS TRADING TRANCHES TRANSACTION TRANSACTION COSTS TRANSPARENCY TURNOVER TURNOVER FIGURES VALUATION WORKING CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/2013/08/18143370/financial-development-latin-america-caribbean-stylized-facts-road-ahead http://hdl.handle.net/10986/15817

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Summary:	The paper documents the major trends in financial development in Latin America and the Caribbean since the early 1990s. The paper compares trends in Latin America and the Caribbean with those in Asia, Eastern Europe, and advanced countries and compares countries within Latin America and the Caribbean. The findings show that financial systems in the Latin America and the Caribbean region have become more diversified and more complex. In particular, domestic financial systems have become less bank-based, with bond and stock markets playing a larger role; institutional investors have gained some space in channeling domestic savings, thus increasing the availability of funds for investment in capital markets; and several economies in the region have started to reduce currency and maturity mismatches. Nonetheless, a few large companies continue to capture most of the domestic savings. And because these trends have unfolded more slowly than pro-market reformers had envisioned, broad, market-based financial systems with dispersed ownership have yet to materialize fully in the region. As a result, convergence is still largely failing to happen and the region's financial systems remain less developed than those of the advanced economies and several other emerging economies, most notably those in Asia.

Financial Development in Latin America and the Caribbean : Stylized Facts and the Road Ahead

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