European bank penetration during the first wave of globalisation: Lessons from Brazil and Chile, 1878–1913

Although the macroeconomics of Latin America during the first wave of globalisation has been largely documented, key microeconomic aspects remain insufficiently studied. This is the case for the process of the foreign bank penetration driven by British and German banks. The article analyses the hist...

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Bibliographic Details
Published in:European review of economic history 2006-12, Vol.10 (3), p.329-359
Main Authors: BRIONES, IGNACIO, VILLELA, ANDRÉ
Format: Article
Language:English
Subjects:
Balance sheets
Bank assets
Bank capital
Bank credit
Bank earnings
Bank loans
Bank markets
Banking crises
Banking industry
Banks
Competition
Competition between banks
Developing countries
Economic history
Globalization
Historical analysis
Host country
Impact analysis
Insolvency
International banking
LDCs
Liquid assets
Macroeconomics
Modern literature
Studies
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Summary:Although the macroeconomics of Latin America during the first wave of globalisation has been largely documented, key microeconomic aspects remain insufficiently studied. This is the case for the process of the foreign bank penetration driven by British and German banks. The article analyses the historical experiences of Chile and Brazil with foreign banks between 1878 and 1913. Based on newly available bank balance sheet data for each country, we searched for evidence of differences in the financial behaviour between local and foreign (British and German) banks as well as possible competition effects induced by foreign entry. In line with the results of the vast literature on the present wave of foreign bank entry into developing countries, we find that, on the whole, foreign and domestic banks behaved differently and that the impacts of British and German bank penetration in Brazil and Chile tended to be positive.
ISSN:1361-4916
1474-0044
DOI:10.1017/S136149160600178X