The simple answer to both questions in the title of this paper: No. We concentrate on three key aspects of the banking system's difficulties during the 2001–02 crisis. Two are related to bank behavior (increasing dollarization of the balance sheet and expanding exposure to the government), and...

This paper examines the determinants of the high intermediation spread observed in the Colombian banking sector for over two decades. A reduced-form equation is estimated on the basis of a bank profit maximization model that permits a decomposition into operational costs, financial taxation,...

Beginning with the papers by Calvo and Reinhart (2002) and Levy Yeyati and Sturzenegger (2001), there has been growing recognition of a disconnect between what emerging economies say they do in exchange rate policy (words), and what they do in practice (deeds). More specifically, a “fear of...

This paper examines the determinants of the high intermediation spread observed in the Colombian banking sector for over two decades. A reduced-form equation is estimated on the basis of a bank profit maximization model that permits a decomposition into operational costs, financial taxation,...

This study examines the recent marked slowdown in bank credit to the private sector in Latin America. Based on a study of eight countries—Argentina, Bolivia, Brazil, Chile, Colombia, Peru, Mexico, and Venezuela—the magnitude of the slowdown is documented, comparing it to historical behavior...

This study examines the recent marked slowdown in bank credit to the private sector in Latin America. Based on a study of eight countries - Argentina, Bolivia, Brazil, Chile, Colombia, Peru, Mexico, and Venezuela - the magnitude of the slowdown is documented, comparing it to historical behavior...

Private income transfers are increasingly viewed as an alternative to government income transfers such as social insurance and foreign aid. This paper models the incentive effects of government-subsidized private transfers and finds that although there is a significant welfare benefit to...

Private income transfers are increasingly viewed as an alternative to government income transfers such as social insurance and foreign aid. This paper models the incentive effects of government-subsidized private transfers and finds that although there is a significant welfare benefit to...

There is a general presumption in the literature and among policymakers that immigrant remittances play the same role in economic development as foreign direct investment and other capital flows, but this is an open question. We develop a model of remittances based on the economics of the family...