Financial reforms in Latin America 1990-1998

In this paper we analyze the financial reforms adopted in Latin America during the last decade. The liberalization process in the capital market implied an absolute change in the orientation of regulatory practices, and not only a deregulation process. Indeed, the before omnipresent administrative style of regulation has been sustituted by new prudential regula tory structures. This positive aspect of reform has produced benefits in terms of efficiency and diversification in capital markets, but some targets were not obtained and new problems arose (mainly the emergence of significant financial crisis). We emphasize from a new institutional economics approach the existence of informational and institutional problems (larger than in developed financial markets) and the costs associated to the long run transitional process to the new regime of financial regulation.