Benefits of Global and Regional Financial Integration in Latin America

33 Pages Posted: 7 Mar 2017

See all articles by Luc Eyraud

Luc Eyraud

International Monetary Fund (IMF)

Diva Singh

International Monetary Fund (IMF)

Bennett Sutton

International Monetary Fund (IMF)

Date Written: January 2017

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 1/4 -3/4 percentage point in these countries, on average.

Keywords: Economic integration, Latin America, Financial markets, Foreign banks, Regional integration, Economic growth, Latin America, Financial integration, Growth

JEL Classification: F21, F23, F36, G15

Suggested Citation

Eyraud, Luc and Singh, Diva and Sutton, Bennett, Benefits of Global and Regional Financial Integration in Latin America (January 2017). IMF Working Paper No. 17/1, Available at SSRN: https://ssrn.com/abstract=2924361

Luc Eyraud (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Diva Singh

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Bennett Sutton

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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