Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336347 
Year of Publication: 
2022
Citation: 
[Journal:] Latin American Journal of Central Banking (LAJCB) [ISSN:] 2666-1438 [Volume:] 3 [Issue:] 2 [Article No.:] 100061 [Year:] 2022 [Pages:] 1-22
Publisher: 
Elsevier, Amsterdam
Abstract: 
This paper revisits the competitive environment of the banking system in Latin America and the Caribbean and investigates the early impact of fintech development in the region thus far. Against the backdrop of high net interest margins (NIMs) and limited financial depth in the region, panel regressions broadly confirm the results of existing literature on the association of NIMs with the changes in financial sector structure, including market concentration, administrative costs, and foreign banks, although differences between domestic and foreign banks narrowed after the 2008-09 global financial crisis. Difference-in-difference regressions and case studies on Brazil and Mexico suggest that fintech is associated with reductions in NIMs and defensive responses by incumbent banks, both of which benefit consumers. The case studies also shed light on regulatory approaches and prudential considerations in fostering financial innovation and banking sector competition.
Subjects: 
Banking
Competition
Fintech
Latin America and the Caribbean
JEL: 
D4
G21
L11
N26
O31
O38
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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