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Former Vice Minister of Argentine Economy Optimistic About Future of His Country's Banking System; Cautions Rebuilding Takes Time

In the early 1990s Argentina's economy was growing at an accelerated pace, but by the end of the decade growth had turned into decline and unemployment was rampant. Former Vice Minister of Economy of Argentina, Miguel Kiguel, discusses the impact of Argentine banking system reforms and looks to the future, and Sergio Schmukler, Latin American expert at the World Bank, examines the problems of currency boards during a conference sponsored by Program in Economic Policy Management.

Miguel Kiguel
Miguel Kiguel

'You Cannot Have a Healthy Banking System in a Sick Economy,' Says Kiguel
"You cannot have a healthy banking system in a sick economy," says Miguel Kiguel, former Vice Minister of Economy of Argentina. In looking forward, Kiguel expects the new banking system to be much smaller than the previous one -- $10-15 billion in deposits versues $82 billion in 2000 -- and to initially focus on short term deposits and lending. It takes time to rebuild institutions, he says.

Real (30:34)Video
Sergio Schmukler
Sergio Schmukler

Popular Concepts of Economic Regulation Should be Rethought, Says Schmukler
Sergio Schmukler, Latin American expert at the World Bank, sheds light on the problems of currency boards. He says popular concepts of economic regulation need to rethought in light of the crisis. Schmukler suggests that dollarization during the crisis may have offered stability since the bank run occurred as fears of devaluation heightened.

Real (25:58)Video

Shot: Oct 18, 2002
Published: Dec 13, 2002
Last modified:Dec 16, 2002