Argentina: banks give you surprises

Abstract

In the wake of the 2000-2003 crisis, Argentine banks have recovered heightened levels of profitability, even above those reached during the Convertibility period of the nineties. This article argues that while in the last six years productive activity has strongly recovered, bank profits were not generated out of the financing of production or the providing of services. Elevated bank profits have instead come from the financing of consumption, financial services and rent coming from public debt. In addition, profits have been sustained by an increase in the concentration of private sector financial entities and their ability to fix market prices. On the other hand, notable sector and regional credit concentration has arisen, along with low levels of credit access for small and medium enterprises. All of which creates a scenario of continuity in the financial system, reformed under the dictatorship and currently far from meeting the financial needs for development.