Argentina’s Financial Sector Development: Key Points and Recommendations
Financial System Intermediation
Argentina’s financial system has limited volumes intermediated and invested, with a scarcity of investment and housing finance products. This is largely due to banks having mostly short-term liabilities and uncertainty regarding the inflation index, making it difficult for them to extend long-term loans to finance productive investments and housing needs.
Government Efforts to Enhance Predictability and Certainty
The government’s efforts to enhance macroeconomic and financial sector policy predictability and certainty would encourage the development of long-term financial intermediation and investment instruments. This is crucial for promoting economic growth and development in Argentina.
Key Elements of Public Infrastructure Supporting Sound Financial Intermediation
- A system of business laws
- Comprehensive accounting principles
- Independent audits
- An efficient judiciary
- Well-regulated professions
- Secure payment systems
Progress Made in Developing Key Elements
Argentina has made progress in developing these key elements, but continued improvement is desirable. This includes:
- Oversight of the payment system
- Corporate accounting
- Financial disclosure
- Governance
Strengthening Accounting and Auditing Framework
Significant strengthening of Argentina’s auditing and accounting framework is underway. The mandatory adoption of IFRS for all listed companies (except banks) as of January 1st, 2012, is a key step towards improving the transparency and accountability of financial reporting in Argentina.
Overall, this report provides a comprehensive assessment of Argentina’s financial sector development, highlighting both progress made and areas for continued improvement.