The rise and fall of Argentina´s currency board illustrates the extent to which the advantages of hard pegs have been overstated. The currency board did provide nominal stability and boosted financial intermediation, at the cost of endogenous financial dollarization, but did not foster fiscal...

This paper examines Argentina´s currency crises from 1970 to 2001, with particular attention to the role of domestic and external factors. Using VAR estimations, we find that deteriorating domestic fundamentals matter. For example, at the core of the late 1980s crises was excessively loose...

The recent global financial turmoil raised questions about the stability of foreign banks’ financing to emerging market countries. W<span style="mso-bidi-font-size: 12.0pt;">hile foreign banks’ lending growth to most emerging market regions contracted sharply, lending to Latin America and the Caribbean (LAC) was significantly more...</span>

This paper analyzes the case of Panama, one of the largest countries currently adopting the dollar as its legal tender, and evaluates some of the predictions of the theory on the costs and benefits of full dollarization. The main conclusions drawn from the case of Panama are that on one hand,...

This paper studies sovereign debt crises during the period 1993-2006 through the prism of the primary sovereign bond market. It finds that one cannot reject the hypothesis that investment banks price sovereign default risk well before crises emerge and well before investors do. Investment banks...

This paper assesses empirically whether global investors´ risk aversion-and its main determinants (U.S. economic growth and the U.S. risk-free rate)-explains developments in Latin American sovereign spreads. We find that global risk aversion is significant and positively related to sovereign...

Many economists believe that, while openness to trade increases average GDP growth rates, it also raises output volatility by exposing countries to terms-oftrade shocks. This view does not take into account that commercial trade might also reduce financially related volatility. Once this is...

Financial globalization, defined as global linkages through cross-border financial flows, has become increasingly relevant for emerging markets as they integrate financially with the rest of the world. This paper argues that, because of the way it is often measured, it has also led to the...

Recent theories of crisis put lending booms at the root of financial collapses. Yet lending booms may be a natural consequence of economic development and fluctuations. So are lending booms dangerous? In this paper, we investigate empirically this question using a broad sample of lending boom...

"This paper, by Meral Karasulu, measures the degree of competition in the Chilean banking sector. This question has traditionally been addressed by measuring the degree of concentration in the sector. However, the relationship between concentration and competition is thin with regard to the...