Latin finance ministers meet in Panama under shadow of US bank crisis

Top financial officials from Latin American and Caribbean countries are meeting Saturday in an annual conclave of the Inter-American Development Bank (IDB), after a week overshadowed by the banking crisis in the United States and Europe.

The IDB's new president, Ilan Goldfajn, a Brazilian economist, was set to address governors of the 48 member countries, most of them finance ministers, beginning at 11:30 am (1630 GMT). The meeting will then continue behind closed doors.

The IDB assembly began Thursday, as officials, businessmen and experts debated issues surrounding poverty and climate change. The US and European banking crisis was not discussed.

But Goldfajn said he expected such "cyclical" issues would be addressed in the closed-door sessions.

The crisis began when California-based Silicon Valley Bank failed, prompting US authorities to guarantee that all depositors would be protected. As the shock of that move reverberated, Swiss banking authorities separately had to prop up Credit Suisse.

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But after US banks suffered their worst week since the 2008 financial crisis, concern has grown across Latin America and the Caribbean that the turmoil could spread.

"You have to be vigilant," Chilean finance minister Mario Marcel told AFP, "because in the financial markets contagion can be very fast."

He also noted that raw materials prices have been falling, adding that "when raw materials drop, our own currencies are weakened."

Goldfajn and the Latin and Caribbean ministers, along with non-regional delegates from European countries, have held a series of bilateral and small-group meetings to address such topics.

Goldfajn also led a meeting with ministers from Amazonian countries to examine ways to finance conservation programs in the vast area.

"Our goal is to establish an Amazon regional project" to provide "ambitious and intersectoral interventions that have a lasting impact in the Amazon region," he said.

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Conservation of the Amazon "affects the entire planet," Goldfajn said, and must be handled on a regional level -- not just by individual countries.

The IDB, with headquarters in Washington, is a prime source of long-term financing for the region.

Source: AFP