Banking in Argentina

During the 1990s, marked by President Carlos Menem's policies of liberalization, Argentina's financial system saw a significant consolidation and strengthening, in large part through foreign investment.

Mergers and acquisitions, which decreased the number of Argentine banks from nearly 300 in 1990 to fewer than 100 at the end of 1999, were expected to continue and lead to improvements in management and efficiency.

Despite the recession (started in 1998 after the international economic shock due to the 1998 Russian financial crisis), bank deposits continued to grow until 2001, although at a much slower rate than in previous years.

Nevertheless, the banking system suffered a fatal flaw: it lent dollars and took deposits in Argentine pesos (nominally argendollars).

This made many banks technically bankrupt and destroyed the confidence of the public in the financial system, which was held responsible for many of the economic ills of the country.