Systems of Banking and Production in Argentina
Vctor Fernndez, Carolina Lauxmann and Julio Tealdo
(Re-)Orienting of Public Credit Towards Productive Activities? ( ...continuation )

Moreover, this occurred in a context of a reduction in the relationship of loans to nf-ps-gdp. The average participation of loans over Gross Domestic Product during the time period 2002-2010 fell 9.30% relative to the average registered during the 1990s (Figure 11).

Figure 11. Evolution of Banking Sector-gdp Relationship at Current Values
Source: Prepared by the authors, based on information from indec, National Accounts, and bcra, Financial Institutions Report.

In this way, we see how the low loan capacity of the financial banking system13 and the capture of a non-significant portion of the same by the manufacturing sector, would seem to corroborate that the transformations following the 2001 crisis and their interior effects did not really provoke a qualitative change in the ssp. In other words, we dont see that the financial system strengthened the development of manufacturing activities in a way that would allow the Argentinean economy to enter the high-yield channels of the gvc.

In an attempt to deepen our analysis and obtain better clarification, we will now examine the sectorial destination of credit within the manufacturing sector, paying particular attention to the level of dynamism in the different branches receiving funds, as well as the ownership structure of the same.

13 Although the decrease in credit depth of the local financial system level of banking is of particular importance, there is an even more relevant element: its low volume in relative terms compared with developed countries and even with other Latin American countries. According to statistics from the World Bank, while the ratio of Private Credit sectors*/Argentinas gdp was barely 13.5% in 2009, in Mexico it reached 23.3%, in Brazil 54.0% and 97.5% in Chile. For developed countries, this relationship can reach up to 165.1%.
*Includes Loans to the Non-Financial Private Sector, financial resources granted to the private sector through the buying of values that do not constitute capital participation and commercial credits as well as other payable credits.