Systems of Banking and Production in Argentina
Víctor Fernández, Carolina Lauxmann and Julio Tealdo

The results obtained allow us to initially conclude that transformations of the Argentinean financial banking system following the 2001 crisis, both on a structural level and in terms of reproductive dynamics — particularly its links with the production sector — have not produced a qualitative and significant change in the ssp, capable of creating a more decentralized, endogenous and dynamic pattern as would be necessary for less subordinated participation in the world economic system.

The banking system has undergone certain modifications; mainly, banks of national origin have partially recovered their relative participation, both in terms of assets, loans and deposits, which was strongly eroded during the second half of the 1990s. However, said transformations still have not broken with the structural elements characteristic of the convertibility era, mainly regarding levels of concentration and relative participation of the type of companies.

The pervasiveness of continuities instead of progress— in terms of concentration and significant foreign participation — is associated with unchanging performance in the ssp framework, based on the dominance of auto-reproductive methods with low links to the productive system, fundamentally in the most dynamic sectors.

Effectively, the majority of income for the financial banking sector still comes from activities with low connection to financial productivity, like providing services and the holding of public bonds. Although a notable portion of their earnings is obtained through financial intermediation, with elevated spread rates, a large part of the same is directed towards personal financing, while credit towards the manufacturing sector continues to be very restricted.

The sectors that do manage to obtain loans have higher levels of concentration and foreignization and are specialized in industrial branches developed based on natural comparative advantages, that are work-intensive and do not require qualified labor. Still, the analyzed information was not sufficient to conclude that large multinational economic groups absorb bank financing. However, the difficulty for small and medium-sized businesses to access financial flows would seem to indicate that this is the case.

In this way, we can state that there is no link established between the financial banking system and the production system that would bring about an ssp with an endogenous, decentralized and dynamic accumulation. In other words, the interaction between both systems — financial and production — does not favor the establishment of a national accumulation nucleus, based on incorporating innovations and technology, that would competitively position the Argentinean economy in the highest value added segments of the gvc, and would contribute, in this way, to the country’s emergence from the global periphery.

Policies that could advance in this area must be conceived in a framework of an integral development strategy. International experiences show that said strategy would require recovery of the centrality of the State as a central pillar. Argentina specifically, but also a large number of Latin American peripheral countries, as we indicated, present an ssp constrained by a strongly multinational and concentrated productive structure, with a propensity to generate benefits that do not foster learning and innovation. This recovery of the State would require explicit and strategic involvement to promote the linking of the financial banking system with local actors, mainly with those actors disposed to develop learning processes, and willing to face the risk of the “curse” of natural resources, as well as those with difficulties in accessing financing, especially small and medium-sized businesses. The tools available to do this, according to studies of comparative economic policy, are diverse and range from regulating the private financial banking system to establishing initiatives and stimulus to direct credit towards specific actors and sectors, using public commercial banks, and even the formation of a development bank to complement the implementation of a development policy with an industrial base.

Now, improving the relationship between the financial banking system and the production system within the framework of an integral development strategy of ssp implies, necessarily, linking management of the financial system with other strategic areas of state intervention, like, for example, those that formulate industrial policies. Making this policy a reality would require a State with the capacity to operate this integration. Analyzing the capacity of the Argentinean state in this sense, as well as that of the rest of Latin American countries, would be a good topic for future research.