Benefits of Global and Regional Financial Integration in Latin America

Luc Eyraud, Diva Singh and Bennett Sutton

No 2017/001, IMF Working Papers from International Monetary Fund

Abstract: The timing is ripe to pursue greater regional financial integration in Latin America given the withdrawal of some global banks from the region and the weakening of growth prospects. Important initiatives are ongoing to foster financial integration. Failure to capitalize on this would represent a significant missed opportunity. This paper examines the scope for further global and regional financial integration in Latin America, based on economic fundamentals and comparisons to other emerging regions, and quantifies the potential macroeconomic gains that such integration could bring. The analysis suggests that closing the financial integration gap could boost GDP growth be ¼ - ¾ percentage point in these countries, on average.

Keywords: WP; composite index; market participant; financial activity; branch market; BIS bank lending; closed economy; GDP ratio; market infrastructure; Latin America; Financial integration; Growth; investment profile subcomponent; Regional integration; Emerging and frontier financial markets; Global; Europe; Asia and Pacific (search for similar items in EconPapers)
Pages: 32
Date: 2017-01-18
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Citations: View citations in EconPapers (11)

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