The 2007-09 global financial crisis disrupted the provision of credit in Latin America less than previous crises. This review from BIS identifies key initial macroeconomic conditions that contributed to the higher resilience of real credit in Latin America during this episode. These relate to economies’ capacity to withstand an external financial shock and the scope for countercyclical macroeconomic policies. It also show that in most cases current macroeconomic fundamentals have deteriorated relative to those in 2007.
A central lesson from the 2007–09 crisis is that the resilience of real credit growth to a severe external shock depends on the strength of key macroeconomic factors in the pre-crisis period.