The financial contagion flowing from Greece into the rest of the euro zone has a familiar ring in Latin America and the Caribbean. Mexico's Tequila Crisis and Argentina's foreign debt default have receded, but not disappeared, from memory.
After having previously fallen victim to many of the same problems, Latin American banks, regulators, governments and markets cleaned up their act. Many in the region are mere bystanders in this particular crisis, although financial markets in Latin America and the Caribbean immediately reflected the impact.
Countries had already applied the lessons learned about too much debt, inflation, poorly regulated financial institutions and opaque government finances.
Latin Trade's banking report in this issue reveals how those experiences have been borne out in results of the leading financial institutions. Banks in Latin America have turned in strong performances, in some cases outshining the most robust economies in the region.
Brazilian banks continue on their path of acquisitions and consolidation. Many of the large international banks--Santander, BBVA, Citi, HSBC and Scotiabank--have seen earnings from the region boost the bottom line of the parent institution. Local banks have also done well in a time of crisis.
While banking regulators and supervisors are credited by many with having helped create stronger financial institutions, compared to years past, banks still face big challenges. And in many countries...