Pension funds potential solution to long-term finance shortage - World Bank

Tuesday, November 29, 2011

Latin American and the Caribbean (LAC) are global leaders in pension reforms, which is something the region could capitalize on as a potential solution to the shortage of long-term financing, World Bank chief economist for LAC Augusto de la Torre told a webcast.

Credit growth in the region has seen large increases in recent years, the expert said, while presenting the results of a study he had authored regarding LAC financial vulnerabilities and opportunities.

De la Torre said credit has expanded largely in the consumer sector, but at the expense of long-term credit and business expansion. This is a cause for concern in the region, as financial systems are mainly funding consumption, he added.

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Greater development of long-term financing is needed to combat the shortage of equity finance currently observed in the region, de la Torre noted.