A lot of foreign money is flowing back into Latin American countries now that they are putting their economic houses in order and the ripples of fear from the 1994 peso crash have dissipated. Relatively poor performance from the Asian tigers and US interest rate jitters have added impetus to the revival of investment inflows. Western custodian banks on the ground in the region - and there aren't that many - are competing for custody revenue in a business that has to cope with increasingly tight profit margins and costly investments in the technology needed to deliver an efficient service.
Which institution does a custody relations manager for an investment house turn to to look after his paper when it isn't clear that Latin American custodians are able to offer distinctive, advantageous services? There is a belief, which the banks concerned don't go out of their way to counter, that they have different styles. But in fact local market inefficiencies constrain emerging market custodians to offer packages of services that are broadly the same.
This is not the case in developed markets where custodian banks can take a smooth-running market for granted and can target clients with tailored packages.