Less volatile growth? The role of regional financial institutions

The volatility of economic growth in the countries of Latin America and the Caribbean has been exacerbated by a lack of suitable instruments for smoothing external shocks. Difficulties with the provision of emergency financing and the development of financial markets capable of trading government securities that incorporate better contingency mechanisms have contributed to economic volatility. To identify routes towards progress with these two issues in the Latin American context, the present article examines the role that could be played by regional and subregional financial institutions, always bearing in mind that while these can supplement global institutions, they cannot supplant them.