Latin America’s economic growth has declined significantly in the last decade. Although a variety of causes can potentially explain this result, there are some structural weaknesses that distinguish Latin America from other regions in the developing world.
Mexico’s financial risks and the policies being adopted by the new administration cannot be adequately assessed without recognizing key features that characterize certain initial conditions.
The report considers three different channels through which Basel III can affect financial stability and development in EMDEs: (1) effects on the volume, composition, and stability of capital flows arising from the implementation of Basel III in advanced economies; (2) effects on financial stability and a level playing field from the adoption of the Basel framework by the home countries of affiliates of foreign banks operating in EMDEs; and (3) effects on financial stability, broad access to financial services, and deepening of local financial systems from the implementation of Basel III by EMDEs themselves.
A CGD Task Force assessed the implications of Basel III for EMDEs and provided recommendations for both international and local policymakers to make Basel III work for these economies. This brief summarizes the key findings and recommendations.