Economics at your fingertips  

Implications of Basel II for Latin America

Andrew Powell

Business School Working Papers from Universidad Torcuato Di Tella

Abstract: Despite delays, Basel II remains set to be finalized this year with implementation in Basel Committee countries by the end of 2006. How will this agreement between a set of G10+ countries affect emerging economies? Two implications are considered here for countries in Latin America. First, earlier papers have suggested that implementation in G10+ may affect the cost of capital and may introduce pro-cyclicality. The analysis presented indicates that these concerns may be exaggerated depending on the value of critical parameters. Second, Latin America may choose to implement the new agreement locally. Five country characteristics are detailed that might serve as a guide to govern whether and if so how Basel II should be implemented. Moreover, a simpler Centralized Rating Based (CRB) approach to enhance provisioning is proposed as an initial or transition step for the region. Finally, a number of largely unresolved, cross-border issues are discussed.

Pages: 25 pages
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Business School Working Papers from Universidad Torcuato Di Tella Contact information at EDIRC.
Bibliographic data for series maintained by Nicolás Del Ponte ().

Page updated 2022-12-01
Handle: RePEc:udt:wpbsdt:basel