Ver el documento de Recomendaciones de Política de CLAAF
WASHINGTON, D.C.(June 7, 2011)—Latin American economies face substantial risks of credit and asset bubbles due to a flood of capital fleeing economic and financial uncertainties in the United States and Europe and should take steps to slow the growth of credit, a group of the region’s top economists and financial experts said in a report released today.
“Rapid increases in real estate and equity prices are raising the concern of the development of asset bubbles in several Latin American economies,” warns the policy statement from the Latin American Shadow Financial Regulatory Committee (CLAFF). “Central banks should consider adopting explicit credit growth caps,” the statement said.
The credit growth caps, a ceiling on bank’s assets or outstanding loans, implemented at the bank level, is one of several measures that the group urged financial policy makers in the region to consider. The recommendation is surprising because it involves setting quantitative limits rather than using price signals.
“In normal times we would not consider such a measure,” said Liliana Rojas-Suarez, a senior fellow at the Center for Global Development and the president of CLAAF.
“But these are not normal times. Uncertainty about debt overhangs and the direction of economic and financial policy in the United States and Europe is likely to persist, causing a flood of capital to Latin America, leading to unsustainable increases in asset prices and credit,” she said. “We need measures to prevent these bubbles before it’s too late.”
The policy statement, Are Uncertainties in the North Seeding a New Crisis in the South? Options for Latin America, warns that economic and financial uncertainties in developed countries are causing problems for Latin America. It proposes a range of policies for addressing the problem.
The Committee was formed in Rio de Janeiro in July of 2000 by a group of prestigious Latin-American economists with strong expertise in financial markets and other macroeconomic issues. Since then, the Committee’s purpose has been to explore the implications of different events affecting the region and to develop independent policy recommendations that can help shape the response of the public and private sectors towards the solution of these problems.
The launch event Tuesday morning included high level panelists who discussed the risks, and explained in detail what the policy recommendations would mean for Latin America. The event was hosted by the Center for Global Development, an influential and independent Washington based think tank. The Center supports CLAAF during its meeting on an annual basis. The current president of CLAAF, Liliana Rojas-Suarez, is a senior fellow at CGD.
Notes to Editors
The Latin American Shadow Financial Regulatory Committee (CLAAF) consists of former senior economic policy makers from across the region who hold a wide variety of views. CLAAF alternates between meeting in Washington, and in Latin America on a twice-yearly basis. At each meeting, the group releases a policy statement on a specific issue affecting Latin America’s financial markets with the goal of influencing the actions taken by the policymakers in the region.
The Center for Global Development (CGD) is an independent, non-profit policy research organization dedicated to reducing global poverty and inequality and to making globalization work for the poor. Through a combination of research and strategic outreach, the Center engages policymakers and the public to influence the policies of the United States, other rich countries, and such institutions as the World Bank, the IMF, and the World Trade Organization to improve the economic and social development prospects in poor countries.
Event materials, including video footage of the event, photos, and a copy of the statement will be available on the Center for Global Development website at http://www.cgdev.org.