The establishment and consolidation of banking systems in Latin America and the Iberian countries came later than in the more advanced North Atlantic economies. They developed steadily during the second half of the nineteenth century, together with the advance of globalization. Various schemes for the issuing of banknotes were adopted in these regions. Some countries established a sole bank of issue, others allowed multiple banks of issue; in some countries they were state-run banks, they were private banks in others. These initial steps in banking development were accompanied by the entrance, first of British banks, and then of German and French banks, that facilitated the flow of goods and capital between their countries of origin and those of their branches, but also, in some cases, with third countries. Foreign banks played a major role in the development, not only of the banking systems, but also of the international financial and commercial exchanges that gave way to export-led economic growth. On the other hand, a reverse process of internationalization was also taking place as some Latin American banks sought access to European markets, and a particularly strong two-way relationship developed, in some cases, with Iberian countries.

These trends were not interrupted in 1914. The presence of the banks of the United States and Canada, which were already important in the Caribbean and other countries, became stronger throughout Latin America. At the same time, banks of issue began to incorporate some of the functions of central banks, in a similar way to what was taking place in the more advanced countries. This process came to fruition in the 1920s, with the increasing centralization of money issue regimes. This resulted, in various nations (mainly those of the Andean countries and Mexico), in the formal establishment of central banks, generally with the advice of international experts. In other countries, such as Argentina, Brazil, and Spain, the leading national public issuing bank assumed many of the functions of a central bank.

After 1929, there was a regression of globalization due to the financial crisis and the breakdown of multilateral mechanisms of international trade. However, global connections continued to be important through the 1930s -with a greater or lower degree in the different countries- as a result of the already acquired importance of international banks, and of the international commercial and financial exchanges. These connections, stronger or weaker depending on the country, were important to the remodeling of their banking systems during the following years, in function of what was happening in the more advanced economies. This process took place in diverse ways throughout Latin America and the Iberian countries, forging banking systems with different degrees of state control and internationalization.

In this session, we attempt to address these issues from a comparative perspective through several empirically-based studies that explore the history of specific banks and/or banking systems, in relation with the varying trends of globalization in which they were immersed. We seek to better understand the evolution of banking systems in Latin American and the Iberian countries, the way it was influenced by globalization cycles, and its relation to economic growth.