The Foreign Conquest of Latin American Banking: What's Happening and Why?
This paper documents the dramatic changes in the banking markets of the major Latin American countries brought about by the foreign penetration. It discusses the reasons for the greater presence of foreign banks and the impact of these banks on the allocation of credit. This is not only important but also timely given the current economic and political turmoil in the region. This situation has created growing concern about increased foreign ownerships in local economies. Only through a better understanding of the role that foreign banks play in Latin America can one appropriately assess whether they benefit or harm local economic growth and development.