Latin America looking to improve risk practices

The FSF also discussed the issue of risk posed by currency mismatches. Although there was a general feeling that policy improvements had already improved growth in the region, FSF participants said further work on macroeconomic policies was required. This included calls for floating exchange rates to facilitate further growth and eradicate mismatches.

The new Basel capital Accord was also on the agenda, with debate centring on whether the necessary preconditions for entry have yet been fulfilled, and how to bring Latin American regulatory, supervisory and risk management practices up to the required standard.

The FSF was established in February 1999 to promote financial stability throughout the international markets. This was the third regional meeting in Latin America, with representatives of 14 countries in attendance, including members of supervisory bodies, regulators and finance ministers. The meeting took place at the Central Bank of Chile in Santiago.