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Argentina 1999 – 2005: Analyzing the Market of Bank Lending for Companies During Times of Sudden Changes of Economic Regimes

Author

Listed:
  • Gustavo Gonzalez Padilla

    () (Central Bank of Argentina)

  • Laura Orué

    () (Central Bank of Argentina)

  • Gastón Repetto

    () (Central Bank of Argentina)

Abstract

The change in regime that came about in Argentine by 2001 provides an opportunity to explore the behaviour of economic agents in a context of changes in the incentives structure, and to consider the way in which their characteristics influenced the observed behaviours. We explore – by tapping the rich data available in the data bases of the Central Bank of the Argentine Republic, National Customs Administration and the Federal Bureau for Public Revenue how the demand for financing by productive units was validated through the bank lending market. We have found that the Argentine financial system showed a behaviour consistent with the one predicted by models of Twin Crises, and that it started out, after a turbulent 2002, on the path to recovery. Despite the fact that the behaviour of aggregate lending was in line with a contraction of demand, a detailed study permits to observe that such a conclusion is dispelled. The estimated models contribute significantly and cogently to explain the amounts effectively transacted in the lending market. There is, lastly, clear evidence of the instability of parameters along the period. Such instability is transitory for some variables but others display changes that seem of a more abiding nature.

Suggested Citation

  • Gustavo Gonzalez Padilla & Laura Orué & Gastón Repetto, 2006. "Argentina 1999 – 2005: Analyzing the Market of Bank Lending for Companies During Times of Sudden Changes of Economic Regimes," BCRA Working Paper Series 200609, Central Bank of Argentina, Economic Research Department.
  • Handle: RePEc:bcr:wpaper:200609
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    File URL: http://www.bcra.gov.ar/pdfs/investigaciones/WP%202006%2009.pdf
    File Function: Spanish version (versión en Español)
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    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    2. Reinhart, Carmen & Vegh, Carlos, 1994. "Inflation stabilization in chronic inflation countries: The empirical evidence," MPRA Paper 13689, University Library of Munich, Germany.
    3. Velasco, Andres, 1987. "Financial crises and balance of payments crises : A simple model of the southern cone experience," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 263-283, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Argentina; credit to firms; financing; financial services; macroeconomic and financial crises;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean

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