Emerging Issues in Financial Development

Since the last wave of financial crises in the late-1990s and early 2000s, the financial systems of Latin America and the Caribbean (LAC) have continued to gain in soundness, depth, and diversity. For all the gains, however, many challenges remain. In many respects, LAC’s financial services industry is underdeveloped by international comparisons, notably, bank credit to the private sector lags and domestic equity markets remain liquidity. Furthermore, the provision of long-term finance—whether to households, firms, or infrastructure—is probably well below what would be desired. This book aims to meet the dual challenge of stock-taking and reassessment of the state of financial development in LAC, so as to set on firmer grounds the financial development agenda going forward. The chapters offer a comprehensive analysis of the status, prospects, and challenges of sustainable financial development in the region. Rather than going in detail into sector-specific issues, the book focuses on the main architectural issues, overall perspectives, and inter-connections. Its value added thus hinges on its holistic view of the development process, its broad coverage of the financial services industry beyond just banking, its emphasis on comparisons and benchmarking, its systemic perspective, and its explicit effort to incorporate the lessons from the recent global financial crisis.