A Quarter Century in the Capital Markets

Twenty-five years ago, LatinFinance was launched with a simple belief: that crisis inevitably gives way to opportunity. The founding intuition was that an economically resurgent Latin America would stand to benefit like no other region. The problem was that in 1988, Latin America was still in the grip of crisis.

In the years that followed, however, the rapid advance of the region’s capital markets nevertheless became testament to the prescience of that initial belief. A quarter century later, as investment in the region has soared, its capital markets had become part of the mainstream of global finance.

But in 2013, the picture is once again changing as the global economy – so supportive of Latin America for so long – loses steam, and as financial markets brace for an inevitable adjustment. As LatinFinance turns 25, we offer a series of sober reflections on Latin America's future, through the voices of a number of the key figures in the region's financial history, including former US Treasury Secretary Nicholas Brady, Pimco chief executive Mohamed El Erian and former Brazilian president F. H. Cardoso.

These reflections are also an attempt to present an agenda for the next quarter century of Latin finance – and, once again, to identify the opportunities that exist in these challenges.

LATINFINANCE 25 YEAR EDITION

THE FUTURE OF LATIN FINANCE: GOVERNANCE & REFORM

Enrique Peña Nieto: The reform imperative
Mexico has an historic opportunity to push through far-reaching economic reforms that will make the country more competitive, productive and prosperous, says its president

Fernando Henrique Cardoso: A crisis foretold
Former president Fernando Henrique Cardoso reflects on what needs to be done to return Brazil to a path of sustainable growth – the foundations of which he helped set

Álvaro Uribe: War and peace
Colombia's economic transformation under Álvaro Uribe, its former president, was partly down to his uncompromising stance on security – hard-won gains he says are now at risk of being undone

Nicholas Brady: Ties that bind
A cooling over the years in relations between Latin America and Washington is not only regrettable, but misguided, says Nicholas Brady, a former US Treasury Secretary. Developments in the global economy could reverse that dynamic

Henrique Capriles: 'Pragmatism is winning'
Despite two electoral defeats, Venezuela's opposition leader Henrique Capriles is still positioning himself as the face of pragmatic politics in Latin America

THE FUTURE OF LATIN FINANCE: STABILITY & REGULATION

Agustín Carstens: Strength in numbers
The next global shock may be coming. But Latin America is better placed than ever to withstand it, says Mexico's central bank governor Agustín Carstens

Guillermo Ortiz: The 'trigger' point
Mexico's "tequila" crisis remains a raw memory as the world braces for a rise in US interest rates. Latin America must be prepared, says Banorte chairman Guillermo Ortiz

William Rhodes: A cautionary tale
Having emerged from the global financial crisis relatively unscathed, Latin America must remember that hubris never pays, says veteran banker William Rhodes

Lee Buchheit: Back to reality
Latin America must not forget the lessons it has taught the world about restructuring, says sovereign debt veteran Lee Buchheit

Henrique Meirelles: Business as usual
Policymakers must focus on fundamentals as global liquidity tightens, says Brazil's former central banker Henrique Meirelles. Breaking with consensus, he insists his country is on the right track

Ruth Krivoy: Love thy neighbor
Venezuela must not squander the opportunities to increase competitiveness as it integrates into Mercosur, the country's former central bank president warns

Guillermo Calvo: A matter of choice
Latin America's resilience to the global financial crisis may have been little more than a fluke. As a period of rapid expansion draws to an end, its fundamentals are now weaker than in 2008 – and the region more vulnerable

THE FUTURE OF LATIN FINANCE: CORPORATES & CAPITAL

Mohamed El Erian: A question of risk
Latin America will not escape the financial volatility that's in store for global markets in the coming years, says Pimco chief executive Mohamed El Erian. But the region will weather it better

Arminio Fraga: A price to pay
As Brazil's prospects take a turn for the worse, its much-touted consumer growth story has come to an end, says Gávea Investimentos chief Arminio Fraga. A less exciting world will replace it

Jorge Errázuriz: The birth of a market
The growth of private pension funds in Latin America has been the single most significant development for the region's capital markets, says Celfin Captial founder Jorge Errázuriz

Roberto Setúbal: No false moves
Latin America's banking system has been defined by a conservatism born of bitter experience, says Roberto Setúbal, chief executive of Brazil's biggest wprivate sector bank

David Bojanini: Rethinking finance
International banks, globalization, and a growing middle class are forcing Latin lenders to find new ways to expand their services, says Grupo Sura CEO David Bojanini

Emilio Botí­n: No home advantage
Latin America will continue to bolster Spain's Banco Santander, as it has already for over two decades, says its chairman Emilio Botí­n

Carlos Garcí­a Moreno: Lessons from the old world
Europe may be mired in crisis, but it still has a few things to teach Latin America when it comes to market development, says América Móvil's chief financial officer Carlos Garcí­a Moreno

Roger Agnelli: The secret of success
Urbanization and a growing middle class will buoy demand for raw materials, says former Vale CEO Roger Agnelli

Nouriel Roubini: When the dust settles
Country differentiation will prove key for investors navigating Latin America's darkening economic landscape

THE FUTURE OF LATIN FINANCE: GROWTH & DEVELOPMENT

Ricardo Lagos: The wealth problem
Latin America faces a problem it has never before experienced: how to meet the demands of a rapidly emerging middle class. Part of the solution, says Chile's former president Ricardo Lagos, lies in tax reform

Enrique Garcí­a: Closing the gap

If Latin America is to meet its demand for infrastructure, it must invest at least $250 billion annually over the coming years – double the amount of the last decade. This can only be done through multilateral cooperation

Claudio Loser: A future uncertain
Latin America's advances in recent years have not been enough to move it beyond a mediocre rate of growth. It will take bold efforts for the region to escape the so-called middle-income trap over the next quarter century

THE EVOLUTION OF THE MARKETS 1988-2013

A Quarter Century of Latin Finance

Financial crisis and economic upheaval may not be the problems of today's Latin America, but 25 years ago they defined the era. Here, we present the events that characterized the region's transformation from the world's most turbulent region to one of its brightest prospects








A Quarter Century of Banking Evolution

The pace of change has picked up in banks operating in Latin America as the region's economies and markets have deepened and evolved. Here, we chart the progress of the biggest local Andean, Brazilian and Mexican banks, as well as the most active global investment banks 




 

League tables:
Tough competition

atin America's tumultuous history has proved a tricky environment for investment banks. While a handful of global institutions still dominate, local banks are on the rise

Sovereign debt: Fork in the road
Latin America's economies are on increasingly divergent paths. Bond investors must now make tough choices between the likely winners and losers
Sovereign deal of the quarter century

Corporate bonds: Between the lines

Latin American corporates have taken great strides in their market funding strategies. Today, debt market access for the best is on a par with their global peers
Corporate deal of the quarter century

Equity markets: A matter of size
Latin American companies have proved they can deliver deals as big as anywhere in the world in ever more sophisticated markets. But smaller issuers are still left out
Equity deal of the quarter century

Mergers & acquisitions: One good turn
The growing ability of Latin corporates to buy, sell and merge with one another has paved the way for a new class of global champions – unthinkable a quarter century ago
M&A deal of the quarter century
Privatization deal of the quarter century

Local currency debt: The color of money
Local markets continue growing as a funding source and investment opportunity, building on years of structural growth. The prospect of thinner global liquidity will offer the markets' next big test
Local currency deal of the quarter century

Infrastructure finance: High wire act
That private sector involvement is vital for the development of infrastructure in Latin America is no secret. But enticing it has proved one of the region's enduring challenges
Infrastructure deal of the quarter century

Structured finance: For better, for worse
Secured financing has helped Latin companies access capital in the toughest of climates when markets otherwise prevented it. It is also proving useful when times are smoother
Structured finance deal of the quarter century

Bank Finance: Rules of the Game
Regulatory and economic uncertainty has forced Latin banks to innovate to raise funding and capital. Yet despite today's expanding balance sheets, simplicity still reigns over most market activity
Bank financing deal of the quarter century


 

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