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(TTN) Latin American Banks
In May this year, three commercial banks in Argentina were sold to European rivals for a total of $ 1,6 billion. This is just one example of a revolution that is taking place in the financial services industry throughout Latin America. Foreign banks now control around 15% of total loans and 16% of total deposits in the six largest Latin American economies.
Brazil and Argentina in particular are attracting the attention of foreign banks, but for different reasons. In the bad old days of hyperinflation, Argentines reacted by buying dollars and keeping them in secret places at home. As a result, the banking system did not develop much. ln Brazil, on the other hand, people learned to live with inflation by indexing prices. The Brazilian banks needed sophisticated technology to collect and invest money instantaneously.
Today, a foreign company that buys a bank in Argentina can encourage new sectors of the population to open bank accounts. In Brazil, foreign investors can develop the financial services market for products such as credit cards, mortgages and consumer loans.
Brazil and Argentina in particular are attracting the attention of foreign banks, but for different reasons. In the bad old days of hyperinflation, Argentines reacted by buying dollars and keeping them in secret places at home. As a result, the banking system did not develop much. ln Brazil, on the other hand, people learned to live with inflation by indexing prices. The Brazilian banks needed sophisticated technology to collect and invest money instantaneously.
Today, a foreign company that buys a bank in Argentina can encourage new sectors of the population to open bank accounts. In Brazil, foreign investors can develop the financial services market for products such as credit cards, mortgages and consumer loans.
1) According to paragraph 1 of the text, in Latin America there is a revolution in:
a) population growth.
b) the banking sector.
c) inflation control.
d) the size of economies.
e) fiscal reform.
2) According to paragraph 2, when inflation was high, people in Brazil and Argentina:
a) reacted in different ways.
b) changed all their savings into dollars.
c) tried to live with sophisticated technology.
d) attracted the interest of foreign banks.
e) stayed at home as much as possible.
3)According to the text, banks in Argentina are
a) more profitable than banks in Brazil.
b) cheaper to buy than banks in Brazil.
c) less developed than banks in Brazil.
d) more complex than banks in Brazil.
e) safer places to keep money than banks in Brazil.
1. b
2. a
3. c
