Argentina Banking Sector: Walk the line

Nov 1, 2012

Argentine banks have so far shrugged off the ill effects of increasing government heavy-handedness. How they withstand a darkening economic climate remains to be seen

By Vinod Sreeharsha

When Argentina’s president, Cristina Fernández de Kirchner, sacked central bank governor Martin Redrado more than two years ago for not following her orders to transfer reserves to the Treasury, she intended for his successor to take a more active, interventionist role.

Mercedes Marcó del Pont, Redrado’s replacement, had previously espoused a view of broadening the bank’s remit – one of the reasons she was picked for the job by Fernández de Kirchner. As she assumed her new role, she continued to say that in public.

A central bank official who joined around the same time said then that Marcó del Pont would "have a more active role than prior leaders did" and that during her tenure she would pursue the "politics of economic development with social inclusion."

To many, that sounded more appropriate for a development bank than a central bank, and private bank executives...

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