Latin American Banks and Euromarkets: A View on the Process of Early Bank Globalization from the Periphery

Global banks and interconnected national banking sectors have been a main characteristic of the modern international financial systems over the last half century. After a sluggish wake up in the early postwar years, international banking took off in the 1970s as the Euromarkets gained traction and strongly developed in the lead up to the international debt crisis of 1982. This article examines the birth of bank globalization in Latin America, a region of the developing world at the centre of global finance and Euromarket developments during this period. It shows that, like their counterparts in industrial countries, leading banking institutions from the region also went international, expanding their presence overseas and their participation in the Euromarkets. The world leading financial centres of London and New York were the main destinations, but they also settled in offshore centres in the Caribbean and other US financial districts from where they conducted international business on their own or in collaboration with other banks. The presence in Germany along with the joint business between Latin American and German banks in the Euromarkets are explored as well. While assessing the extent and scope of early Latin American bank globalization for the first time, the article also provides insights on the evolution and changing nature of this process over the following period.