The evolution of the banking sector during the Cambiemos government

Abstract

When Mauricio Macri —the candidate of the Cambiemos coalition— took office in december 2015, he rolled out a series of reforms aimed at liberalizing and deregulating the economy, dismantling the policy framework of the previous decade. The financial and banking sectors were deeply affected by this process: a number of regulations were removed with the objective of allowing the sectors to freely determine fundamental economic variables. The objective of this article is to analyze the evolution of the argentine banking system during the Cambiemos administration. To do so, we analyze the policies implemented and their impact on a series of variables, such as profitability, bank asset structure, allocation and composition of credit and added value, among others. The tentative hypothesis of the work is that two stages of the Cambiemos government are distinguished: a first in which regulatory changes tended to guarantee, and even increase, the profitability of the financial sector even in a context of increasing uncertainty and retracement of the real economy. In a second phase, which began in october 2018, following imbalances that began to arise as a result of these deregulation and liberalization policies, commercial banks retreated from giving private credit and began lending to the central Bank, attracted by the very high interest rates. In this context, banks were far from directing their loans towards productive development, in a context of brutal decline in economic activity. In this sense, as we show in the article, the experience of the Cambiemos government shows us fully that neoliberal policies generated a setback in the direction of deepening credit to productive sectors in pursuit of sustainable economic development.