September 1, 2013
Latin America’s resilience to the 2008 global financial crisis was as surprising as the crisis itself. It seemed an improbable outcome, especially given the fate of emerging markets following the 1998 Russian crisis. Back then, it took roughly five years for spreads to return to their pre-crisis levels, and that episode involved only emerging market economies – relatively minor players in global capital markets.
A reasonable inference was that the emerging market turmoil in the wake of the Russian crisis was a function of weak market institutions in the emerging world. So, one might have reasonably assumed that the impact on emerging markets of a major crisis in the developed world would b
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. By Guillermo Calvo