What is a problem, however, is that the reform will create further competitive distortions owing to retained profits being given preferential treatment over the distribution of dividends by incorporated enterprises, and other sources of taxable income. This will weaken the steering function of the capital markets.
The region is finally leaving behind the well-known original sin that features last decades (currency mismatches), providing solid grounds for developing domestic yield curve in local currency. All over Latin America, financial systems are better-matched, well capitalized and less exposed to public sector debt, another sin from the past.