June 28, 2021
11 am EST
“The Emergence of Banks in Latin America, 1850-1875: Was There a Financial Revolution or Something Else?”
Carlos Marichal, Professor Emeritus of Latin American History, El Colegio de México
Carlos Marichal is a Professor Emeritus in Latin American History at El Colegio de México, a leading public research university in Mexico, since 1989. Professor Marichal is a specialist in the economic history of Mexico and Latin America. He is the author of several books, including A Century of Debt Crises in Latin America (1989), Bankruptcy of Empire (2007), Nueva Historia de las Grandes Crisis Financieras – a history of global financial crises (2010), Historia mínima de la deuda externa de América Latina – a history of the external indebtedness of Latin America (2014), and most recently a book on the emergence of banks in Latin America. He has also published many works on intellectual history, international relations, and business history. Professor Marichal has been a member of the editorial boards of journals such as Financial History Review, Historia Mexicana, Revista de Historia Económica – Journal of Iberian and Latin American Economic History, and América Latina en la Historia Económica – Latin America in Economic History. He is an enthusiastic promoter of digital history initiatives, including H-Bancaria, a website on the banking and financial history of Spain and Latin America. Professor Marichal has been a visiting professor in several prestigious universities around the world. He is a founding member and a former president of the Mexican Economic History Association (2001-2004). Professor Marichal is a member of the Mexican National System of Researchers (Level III, emeritus) and was the recipient of Mexico’s National Prize in Arts and Sciences in 2012. He became an international honorary member of the American Academy of Arts & Sciences in 2019.
In this paper we offer a general overview of how banks first developed in various important Latin American nations in the mid-19th century with particular emphasis on the larger domestic banks, which forged close ties with local governments. This interpretation runs counter to the traditional views on the origins of banking in this region, the most common misconception being that in this era British banks dominated Latin American finances and faced little competition from domestic banks. In fact we argue that the situation was much more complex. We focus particularly on early banking in four country cases in the following order, basically for chronological reasons: Brazil, Uruguay, Argentina and Cuba. The main argument put forward is that while there were particular reasons for the birth of banking in each of these countries, including specific political, economic and social circumstances, there are certain parallels that we think worthwhile developing in regards to the institutional framework and special role of the largest bank in each country and its ties to the respective government. Hence this essay is, in a sense, an exercise in historical political economy that focuses on a somewhat forgotten chapter on the origins of Latin American banking.