Bank laws, economic growth and early banking in Latin America: 1840-1920

This article examines the impact of legal and economic factors on the growth of commercial banking in Latin America in the 19th and early 20th centuries. Using annual data for five countries for the period 1840-1920, this article shows that growth in exports had a significant effect on the growth of bank liabilities (deposits plus note issues). For the most part, changes in banking laws did not have a significant effect on the development of banking. This latter result likely reflects heterogeneity in the meaning of changes, as well as the potential dominance of de facto political factors in shaping the importance of de jure legal changes. © 2014 Elsevier Inc.