FINANCIAL INTEGRATION IN LATIN AMERICA BETWEEN 2000 AND 2014

PROGRESS, LIMITS AND THE ROAD AHEAD

Abstract

This paper aims at updating the analysis of financial integration in Latin America, covering the period from 2000 to 2014, and expanding the scope of former works on the theme by including political and institutional elements to the analysis. It provides a comprehensive view on financial integration, bringing together economic, institutional and political factors in order to assess the evolution of integration and its limits in the context of regional particularities. The main conclusion is that financial integration in Latin America progressed in non-negligible way in the period 2000-2014, but in a slow pace. Nevertheless, the development of this process did not removed relevant barriers to its expansion – and created others – due to the maintenance of regional asymmetries in key areas, such as market size, regulation and financial market infrastructure. In addition, the paper stresses that the apparent political alignment among Latin American countries in our period of analysis was not sufficient to stimulate the adoption of a common project for financial integration, rather registering fragmented initiatives that undermines the development of this process.