Benefits of Global and Regional Financial Integration in Latin America
IMF Working Papers, January 18, 2017
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- Benefits of Global and Regional Financial Integration in Latin America
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Bibliographic details
- Authors: Luc Eyraud, Diva Singh, Bennett W Sutton
- Published: January 18, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475568684.001
Core findings
- 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 these would represent a significant missed opportunity.
- The paper examines the scope for further global and regional financial integration in Latin America based on economic fundamentals and comparisons to other emerging regions.
- The analysis quantifies the potential macroeconomic gains from increased financial integration.
- Closing the financial integration gap could boost GDP growth be ¼ - ¾ percentage point in these countries, on average.
Analysis focus and approach
- Comparative analysis: places Latin America against other emerging regions to assess the scope for further global and regional financial integration.
- Economic fundamentals: evaluates underlying conditions that determine the potential for deeper integration.
- Quantification: provides macroeconomic estimates of gains from closing the financial integration gap.
Implications and strategic considerations
- Macroeconomic: a measurable uplift to GDP growth of ¼ - ¾ percentage point on average across the countries studied if the financial integration gap is closed.
- Strategic urgency: withdrawal of some global banks and weakening growth prospects increase the opportunity cost of delaying deeper regional integration.
- Policy opportunity: ongoing initiatives to foster financial integration should be prioritized to avoid missing potential gains.
Source: Benefits of Global and Regional Financial Integration in Latin America, Luc Eyraud, Diva Singh, Bennett W Sutton, January 18, 2017.
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- Benefits of Global and Regional Financial Integration in Latin America