The Bank Regulation in Argentina : - a Comparative Study of 1990 and 2003

Abstract: Background: The Argentine bank sector suffered from inefficiency and high operative costs throughout the 1990s, as well as a low confidence mainly due to uncertainty about future government policies caused by inconsistent government policies. The Argentine bank regulation underwent several changes between 1990 and 2003 to improve the performance within the market and increase the overall confidence for the Argentine bank system. The Central Bank was given a new role and made independent, capital requirements were introduced and the Supervision of the bank sector was changed. Purpose: The purpose of this thesis is to make a comparative study of the bank regulation in 1990 and the bank regulation in 2003 in Argentina, in order to analyse how the bank regulation has affected the performance of the bank market. Method: To reach the purpose of the report a qualitative method has been conducted, using secondary data, mainly collected in Argentina. Results: The overall conclusion is that the bank regulation in 2003 has improved the performance within the bank sector. The efficiency of the banks has increased, although the results within the sector are still low. The service quality has increased through better communication, higher credibility and security. There is a tendency of increased market power for foreign banks and large national banks, although there are still few signs of banks having substantial market power.