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Banking and finance in Argentina in the period 1900–35

Author

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  • Leonard I. Nakamura
  • Carlos E. Zarazaga
Abstract
From 1900 to 1935, Argentina evolved from an economy highly dependent on external, primarily British, finance to one more nearly self-sufficient. We examine the failure of domestic finance to adequately fill the void left by the decline of London and the breakdown of the world financial system in the interwar period, when neither the Buenos Aires Bolsa nor the private domestic banks developed rapidly enough to fully replace British investors as efficient channels for financing private investment. One consequence is that Argentine investable funds were increasingly concentrated in a single institution, the Banco de la Nacion Argentina (BNA), creating a lopsided financial structure that was vulnerable to rent seeking and to authoritarian capture. Nevertheless, several measures, including gold reserves, interest rates, money supply, bank credit, and the market capitalization of domestic corporations, attest to the very high level of financial development achieved by Argentina.

Suggested Citation

  • Leonard I. Nakamura & Carlos E. Zarazaga, 2001. "Banking and finance in Argentina in the period 1900–35," Working Papers 0108, Federal Reserve Bank of Dallas.
    • Handle: RePEc:fip:feddwp:0108
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    References listed on IDEAS

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    1. Anna J. Schwartz, 1998. "Schwartz on Friedman," The Region, Federal Reserve Bank of Minneapolis, vol. 12(Sep), pages 4-8.
    2. Loretta J. Mester & Leonard I. Nakamura & Micheline Renault, 1998. "Checking accounts and bank monitoring," Working Papers 98-25, Federal Reserve Bank of Philadelphia.
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    5. Taylor, Alan M., 1998. "Argentina and the world capital market: saving, investment, and international capital mobility in the twentieth century," Journal of Development Economics, Elsevier, vol. 57(1), pages 147-184, October.
    6. Leonard I. Nakamura & Carlos E. Zarazaga, 1997. "Economic growth in Argentina in the period 1900-30: some evidence from stock returns," Working Papers 97-22, Federal Reserve Bank of Philadelphia.
    7. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    8. Taylor, Alan M., 1992. "External Dependence, Demographic Burdens, and Argentine Economic Decline After the Belle Époque," The Journal of Economic History, Cambridge University Press, vol. 52(4), pages 907-936, December.
    9. Milton Friedman & Anna Jacobson Schwartz, 1970. "Monetary Statistics of the United States: Estimates, Sources, Methods," NBER Books, National Bureau of Economic Research, Inc, number frie70-1.
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    Cited by:

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    2. Reinhart, Carmen M. & Rogoff, Kenneth S., 2013. "Banking crises: An equal opportunity menace," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4557-4573.

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