Banking: US urges financial services development in Latin America
Senior officials at the US Treasury are urging Latin American countries to pursue policies that will help grow their mortgage markets, despite the sub-prime woes of the US.
"The countries of Latin America need to look for opportunities to make credit and mortgages more readily available"
"In the US upwards of 65% of the population are home owners and this is something that countries in Latin America would like," Hank Paulson, US Treasury secretary, told Euromoney during last month’s Inter-American Development Bank meeting in Miami. Paulson’s colleague, Anna Cabral, US treasurer, agrees. "The countries of Latin America need to look for opportunities to make credit and mortgages more readily available," she says.
But as the US comes to terms with its sub-prime mortgage crisis, Cabral stresses that Latin nations need to act with caution in developing their mortgage markets. "Innovation and creativity in the mortgage market is important but it has to be monitored," she says. "The type of innovation that led to a substantial increase in home ownership in the US is not a trend we want to reverse but going forward we need to make sure people are better protected." To that end, the US Treasury is engaged in conversations with its counterparts in certain countries in Latin America, such as Honduras, El Salvador and Mexico, about how they can develop their financial systems.