ABSTRACT
This chapter analyzes the financial sector in general, and discusses the comparison between Latin America and East Asia. Since the mid-1980s, there has been an interest in comparing Latin America and East Asia. Initially the comparisons centered on broad issues of development strategy and concentrated on what were then four highly successful “newly industrializing economies” in the two regions – Brazil and Mexico, Korea and Taiwan. In East Asia, the financial sector was an important part of the economic model that produced the “East Asian Miracle.” In 1997, the Banking Law was modified to bring it up to date with international and domestic trends that had emerged over the preceding decade. After the Thai crisis of July 1997, foreign creditors reconsidered their loans to Korean entities and began to withdraw. The financial crises centered on the banking sector in Chile and Korea, but there is another important part of the financial sector that must also be taken into account.
