BIS Papers No 36 New financing trends in Latin America: a bumpy road towards stability. Proceedings of a joint meeting organised by the BIS and the Federal Reserve Bank (FRB) of Atlanta in Mexico City, May 2007

New financing trends inLatin America: a bumpy road towards stability......Page 1
Foreword......Page 3
Central banks and ministries of finance......Page 5
Keynote speakers......Page 6
Contents......Page 9
2. What has changed in financing in recent years?......Page 11
1. Introduction: Latin American financial markets in historical perspective......Page 25
2.1 Portfolio equity flows and stock market development in Latin America......Page 27
2.2 Foreign direct investment......Page 30
3. Domestic banking system......Page 31
4. Remittances......Page 35
5. Conclusion......Page 36
References......Page 37
1. Introduction......Page 38
2. The cyclicality of macroeconomic policies in developing countries......Page 40
3. Factors underlying procyclicality in macroeconomic policies......Page 43
3.1 Capital account volatility and procyclical policy responses......Page 44
3.2 The role of financial liberalisation and financial market development......Page 46
3.3 Fiscal and monetary policy rules versus discretionary flexibility......Page 49
4.2 Macroeconomic policies and national development strategies......Page 51
4.3 Capital account and financial market policies......Page 52
4.4 International policies to reduce financial volatility......Page 53
References......Page 54
1. Introduction......Page 56
2. The value of domestic bond markets......Page 57
3.1 Historical underdevelopment of domestic bond markets......Page 58
3.2 Main features of bond markets in Latin America......Page 59
3.3.1 Endogenous factors: changes in government policies......Page 66
3.3.2. Exogenous factors: favourable external environment and long-term portfolio diversification......Page 70
References......Page 73
2. Currency and maturity mismatches......Page 75
2.1.1 Currency mismatches......Page 76
3. Risk structure of local debt markets......Page 82
3.1.2 Short-term interest and Inflation-linked debt......Page 83
3.1.3 Fixed rate debt......Page 84
3.1.5 Asset-backed securities......Page 85
3.2 Risk associated with the type of issuer......Page 86
3.3 Risk associated with the type of investor......Page 87
4.1 Liquidity......Page 89
4.2 Risk management......Page 91
4.4 Clearing and settlement......Page 93
References......Page 95
1. Introduction......Page 98
2. Public debt composition: disentangling price and composition effects......Page 103
3. The framework of analysis: debt dynamics......Page 106
4.1 Contributions to debt reduction......Page 107
4.2 A counterfactual exercise: debt reductions without proactive management policies......Page 108
4.3 Stress test: resilience in debt vulnerability......Page 110
5. Conclusions......Page 117
References......Page 118
1. Introduction......Page 120
2. Corporate governance as a case study......Page 123
2.1 Analysis......Page 124
2.2 Determinants......Page 127
2.3 Effects......Page 137
2.4 Robustness......Page 139
3. Conclusion......Page 143
 Appendix......Page 144
 Appendix......Page 147
 References......Page 148
1. Introduction......Page 150
2.1 Evidence of structural changes in the transmission mechanism......Page 151
2.2 The interest rate channel: impact on the interest rate pass-through......Page 152
2.3 The exchange rate channel: reducing balance sheet vulnerabilities......Page 154
2.4 The credit channel: sustaining credit in periods of stress......Page 155
2.5 The expectations channel: increasing the sensibility to future developments......Page 157
3. Fostering domestic financial markets: policies and policy coordination......Page 158
3.1 What can central banks and treasuries do?......Page 159
3.2 Coordination of debt management......Page 160
4. Concluding remarks......Page 161
 Appendix: Monetary operating procedures and  monetary control in Latin America......Page 163
Increasing reliance on market-based instruments......Page 167
Implications for the effectiveness of market-based instruments......Page 169
 References......Page 171