As a result, banks in these countries appear to have sustained minimal new damage. Argentina is a notable example: efforts to strengthen the financial position of the banks, coupled with improvements in prudential regulation, have allowed the banks to remain relatively healthy, despite the effects of the crisis and the country’s protracted recession.
This discussion suggests that financial system vulnerabilities probably were more severe in Asia than in Latin America. Such a conclusion, however, does not necessarily imply that Asian financial institutions were fundamentally less efficient or effective, only that they were more vulnerable when the crisis hit.3 Suffice it to say that policymakers in Latin America also are wrestling with sizable financial sector problems.