The Role of Public Banking during
Financial Crises in Argentina and Uruguay
Wesley Marshall
The Outbreak of the 2001-2002 Banking Crisis ( ...continuation )

The role taken on by public banking, particularly by the Bank of the Nation (bn) had four general forms, all related to each other and with important overlaps. First, public banks represented the most counter-cyclical entities in the market. Second, the bn effectively served as a bank “orphanage” for entities abandoned by Crédit Agricolé. Third, together with private capital national banks, national banking served as a key piece to put the brakes on the plan to dollarize. Fourth, public banking was essential to carry out government plans to center the economy around thepeso . Below, each of these points will be examined on its own.

Figure 1. Variation in Deposits by Type of Bank during the Argentinean Banking Crisis
(January 2002 — June 2003)
Source: bcra.

Figure 2. Variation in Loans by Type of Bank during the Argentinean Banking Crisis

Source: bcra.

Figure 3. Participation of Different Types of Banks in Total Deposits

Source: bcra.