Capital markets integration in Latin America will boost economic growth by improving the allocation of savings and capital. To reach integration, private and public stakeholders must advocate for policies that deepen domestic markets while expanding the scope of the current integration. Initiatives including the Pacific Alliance, AMERCA and B3’s strategy have laid the groundwork for integration. However, Latin America still faces significant barriers to unifying its markets. The macroeconomic environment varies from one country to the next. Supply and demand of securities is dominated by regional giants, while other countries struggle to achieve the scale and liquidity necessary to develop robust capital markets. Regulation across borders is divergent. The region’s exchanges operate using different market infrastructures for trading and post-trading systems.
This report translated the ASEAN and Nordic integration strategies to the Latin American context. The result is a framework that builds on existing initiatives through a new regional platform called “the Pacific Alliance Plus”, that strives to (i) create a better environment for integration through policy harmonization and knowledge sharing, (ii) integrate market infrastructure and (iii) provide member states with the tools needed to strengthen domestic markets. Lessons from ASEAN and the Nordics are not sufficient to address the problems that the region faces, therefore this report also looks beyond these benchmarks to grapple with innovative ideas that can address the idiosyncrasies of the Latin American case. With the IDB as its technical advisor, the Pacific Alliance Plus will be successful in guiding Latin America towards a future of integration and prosperity.