Argentina Crisis Related to Greece's Case
BANKING PAPER REQUIEREMENTS
My paper will discusses about the link between both crisis in Greece and Argentina, what we have learnt since this crisis and what are the common mistakes committed by both. Economic environment
“Eleven years after the financial crisis of 2001, which led to the largest default in history (75 billion Euros), Argentina has reimbursed, the August 3, the last holders of securities issued during the freezing of assets, called "corralito" ("small enclosure").
The final explosion occurs when the Minister of Economy Domingo Cavallo announced on 1 December 2001, before the flight of capital and the liquidity crisis, the implementation of corralito, limiting bank withdrawals to 250 pesos a week and prohibited any sending funds outside. The disadvantage of a currency board is that there is no one to act as banker of last resort able to provide liquidity banks subject to a rush of depositors.
The elements concerning the beginning of the crisis are going to be related to economics and the overall mistakes committed by the financial crisis that happened in Argentina and the mistakes related to the banking system set up, internal and external.
Table of contents
Economic environment 1
THE SITUATION BEFORE THE CRISIS 3
ARGENTINA: 3
The reasons of the convertibility plan, his strengths 3
And his weaknesses mixed with uncontrollable effects 3
A crisis of confidence widespread 4
Focus on the banking crisis and the currency crisis 4
The strategies adopted by foreign banks 5
The definition of three ideal types of foreign banks in emerging markets provides a first level of analysis as follow: 5
Why did banks come in Argentina? 6 incentives and attractiveness for foreign banks 6
Principle of risks diversification 7
Comparison with economical point of view 9
COMPARAISON ABOUT THE DEBT CRISIS 9
COMPARAISON ABOUT MONETARY POLICY: 9
Comparison economic growth since 1999 Argentina / Greece 9
Current balance 10
THE
My paper will discusses about the link between both crisis in Greece and Argentina, what we have learnt since this crisis and what are the common mistakes committed by both. Economic environment
“Eleven years after the financial crisis of 2001, which led to the largest default in history (75 billion Euros), Argentina has reimbursed, the August 3, the last holders of securities issued during the freezing of assets, called "corralito" ("small enclosure").
The final explosion occurs when the Minister of Economy Domingo Cavallo announced on 1 December 2001, before the flight of capital and the liquidity crisis, the implementation of corralito, limiting bank withdrawals to 250 pesos a week and prohibited any sending funds outside. The disadvantage of a currency board is that there is no one to act as banker of last resort able to provide liquidity banks subject to a rush of depositors.
The elements concerning the beginning of the crisis are going to be related to economics and the overall mistakes committed by the financial crisis that happened in Argentina and the mistakes related to the banking system set up, internal and external.
Table of contents
Economic environment 1
THE SITUATION BEFORE THE CRISIS 3
ARGENTINA: 3
The reasons of the convertibility plan, his strengths 3
And his weaknesses mixed with uncontrollable effects 3
A crisis of confidence widespread 4
Focus on the banking crisis and the currency crisis 4
The strategies adopted by foreign banks 5
The definition of three ideal types of foreign banks in emerging markets provides a first level of analysis as follow: 5
Why did banks come in Argentina? 6 incentives and attractiveness for foreign banks 6
Principle of risks diversification 7
Comparison with economical point of view 9
COMPARAISON ABOUT THE DEBT CRISIS 9
COMPARAISON ABOUT MONETARY POLICY: 9
Comparison economic growth since 1999 Argentina / Greece 9
Current balance 10
THE