Dyna Heng, Anna Ivanova, Rodrigo Mariscal, Ms. Uma Ramakrishnan, and Joyce Wong
This paper examines the state of financial development in the Latin America and Caribbean
(LAC) region as well as potential growth and stability implications from further
development. The analysis suggests that access to financial institutions has expanded notably
in the past decade, and the region compares favorably with other emerging market regions on
this dimension. The region, however, continues to lag behind peers on broader financial
development, especially with respect to markets, though there is substantial heterogeneity
across countries. Financial systems in many LAC countries are also underdeveloped relative
to their macroeconomic fundamentals. Further financial development could convey net
benefits to the region, provided there is adequate regulatory oversight to prevent excesses.
Pablo Lopez Murphy, Mr. Mauricio Villafuerte, and Mr. Rolando Ossowski
This paper analyzes recent fiscal policies of nonrenewable resource exporting countries in Latin America and the Caribbean in the context of sharp swings in resource prices. Fiscal policies were predominantly procyclical during the boom period 2003-08 but to significantly differing degrees within the sample. Countries that pursued more conservative fiscal policies during the boom were then able to implement countercyclical fiscal policies during the downturn; moreover, they reduced or maintained their fiscal vulnerability to resource shocks, while their long-term fiscal sustainability positions improved or were broadly unchanged. However, these dimensions of fiscal policy did not seem to be linked to fiscal rules or resource funds, as countries with such institutions displayed a broad range of fiscal responses to the recent cycle.
This paper integrates into the Fiscal Transparency Code (FTC) a new fourth pillar (Pillar IV) on natural resource revenue management. This completes the pending update to the IMF's FTC, as set out by staff in 2014 (see IMF 2014a).