ABSTRACT
The development of the European Union is generally regarded as one of the most advanced regional integration processes. The experience of Latin American countries has raised questions regarding the motives behind exchange rate regime shifts, why corner regimes have become more prevalent in the region and why no regional solution to exchange rate stability has been sought. One motivating factor has been the completion of economic and monetary union and the introduction of the euro in the euro area. Latin America has also witnessed progress in regional integration since the 1990s, although the road has been rocky owing in part to financial crises affecting a number of countries in the region. The changes to the different components of Latin America’s financial system over the last decade are worthy of review. Public institutions, notably central banks, have played a crucial role in the development and improved functioning of financial systems in the region.
