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Article: From famine to feast. (banking in South America)(Latin American Finance Survey)
- Article from:
- The Economist (US)
- Article date:
- December 9, 1995
CopyrightCOPYRIGHT 1995 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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IF YOU take a taxi in downtown Sao Paulo and find yourself short of cash, don't worry. Your cab driver will almost certainly take a cheque. When he deposits it in his bank account, it will be cleared by the end of the day. Try the same trick in neighbouring Buenos Aires, and your cabby will stare at you with incredulity. He almost certainly won't have a bank account. Half the Argentine middle class do not have cheque-books; even senior executives get paid in cash.
What accounts for this dramatic difference? It is hardly as though Brazil is a sophisticated first-world economy, while Argentina remains a third-world backwater. The difference lies in the way ...