September 1, 2013
It’s a quirk of Latin America’s modern financial history that the devastation created elsewhere by the 2008 global crisis was, for the region, something of a blessing.
European banks, in particular, retrenched and then retrenched again as the crisis gained pace. But what was an ill wind for these institutions proved a boon to their LatAm counterparts.
The gap these departing banks left in international markets provided opportunities for local and regional players to prove themselves. Moreover, in a kind of virtuous circle, international investors attracted by Latin American interest rates had the opportunity to test the currency markets.
The two largest Latin economies – Brazil and Mexi
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. By Karen Schwartz