FM11 The Efficiency-Stability Trade-off: Interest Rate Spreads in Venezuela (2007). With Luis Zambrano and Andreas Faust), Developing Economies, Vol. 45, N° 1, pp. 1-26. This paper examines the determinants of the high intermediation spread observed in the Venezuelan banking sector during the 1990s. A reduced-form equation is estimated on the basis of a simple behavioral model for the banking firm. Using different types of estimators for aggregate and pooled data of the financial system, we found that high spreads can be attributed to market power, high operating costs, and expected portfolio risk. The empirical results also suggest a trade-off between assuring bank solvency and lowering profitability.
FM10 El Control de los Agregados Monetarios: Lecciones y Experiencias del Caso Venezolano Reciente, (2009), Economia e Sociedade, Vol. 18, N° 1. This paper explains why monetary aggregates have been beyond the control of the monetary authorities in Venezuela. Several analytical reasons are presented to explain the sources of endogeneity in monetary variables. Some preliminary empirical evidence is presented in support of the endogeneity thesis.
FM9 Oferta y Demanda de Crédito en Venezuela: ¿Qué lado del mercado ha privado en el comportamiento del crédito bancario? (2006). With Claudia Verde. Mimeo. This paper explores the lending behavior of Venezuelan financial intermediaries over the business. Both, supply and demand function are estimated using TSLS for two different time series; one monthly and the other quarterly. We try to separate the sample into demand and supply regimes and find strong evidence to suggest that loans are supply-driven during expansions but demand-driven during contractions.
FM8 Calidad de la Cartera de Crédito del Sistema Bancario en Venezuela: Estimación y Proyección utilizando variables macroeconómicas (2007) With Irene Costa, Revista de Economía y Estadística, Vol. 65, N° 2. The paper presents a dynamic econometric estimation of the main determinants of non-performing loans in the Venezuelan financial system. The work suggests that systemic or macroeconomic factor not only explain but predicts the evolution of credit quality very well.
FM7 The Demand for Bank Loans in Venezuela: A Multivariate Cointegration Analysis (2002). A spanish version published in Investigación Económica, Vol. XLII, N° 245. We estimate a credit demand function for Venezuela. The estimation is based on a specification which sees credit demand as driven by firm’s financial decisions. Cointegration tests indicate that there is one stationary long-run relationship between the real stock of loans, an index of real sales, the interest rate on loans, the real exchange rate and the economy mark-up. The short-run dynamics of the demand for real loans is consistent with the view that the interest is exogenous and the quantity of bank borrowing is largely demand determined.
FM6 A Chronicle of a Latin American Financial Crash: The case of Venezuela (2002). Published in Stein, H., Ajakaiye, O. and P. Lewis (Eds.) “Deregulation and Banking Crisis in Nigeria: A comparative study”, Palgrave Global Publishing, New York, NY. This paper details the events that precipitated Venezuela’s financial crisis (1994-1995) and examines how the problems took shape. We emphasize the role played by the macroeconomic context, the institutional setting, and the economic policy orientation. It shows that if orthodox financial reforms are implemented without taking due care of a fragile institutional setting, the results can be counter-productive.
FM5 Un Marco Referencial para el Desarrollo de las Microfinanzas en Venezuela (2002). With Francisco Vivancos and Luis Zambrano. Revista Venezolana de Análisis de Coyuntura, Vol. 8, N° 2. The paper is an attempt to understand the role and extent of microfinance in developing countries. We summarize important lessons derived from abundant experiences and contrast them with the implication derived from the new legal framework that regulates microfinance in Venezuela.
FM4 Reservas Bancarias y Gestión de la Política Monetaria: Algunas consideraciones para el caso venezolano (2001). With Luis Zambrano. Mimeo. We analyze the role of banking reserves in the design of monetary policy. We focus on the effects of lower reserve requirements as well as the conditions needed to achieve this goal in the Venezuelan financial system. We argue that it is possible to diminish the unpredictable variation in the demand for reserves as well as to develop mechanism to mitigate shocks to supply, but more liquid markets, a more active Central Bank in the market for reserves, and changes in the payments system are needed.
FM3 Consideraciones sobre el Trabajo ¿Por qué Venezuela tiene Diferenciales de Tasas tan Altos? (2001). With Luis Zambrano and Andreas Faust, Revista BCV, Vol. 15, N° 2. An evaluation and critique of the work published by Oficina de Asesoría Económica y Financiera de la Asamblea Nacional on interest rate spreads in Venezuela.
FM2 El Impuesto al Débito Bancario: El caso venezolano (2001). With Francisco Vivancos, Andreas Faust and Pedro Echeverría. Temas de Coyuntura, N° 43. This paper discusses the context, justification, and implications associated with the implementation of the financial transaction tax in Venezuela (in year 1994 and between 1999 and 2000). Empirical evidence shows that the tax was very effective in terms of fiscal collection but it changed the public’s behavior towards cash.
FM1 Determinantes del Spread Financiero en Venezuela: Un modelo de ecuaciones simultáneas (2000). With Luis Zambrano and Andreas Faust. Revista BCV, Vol. 15, N° 1. The paper presents an econometric estimation of the main determinants of interest rate spreads in Venezuela using a system of simultaneous equations. This method allows us to solve the endogeneity problem between the lending rate and the volume of loans as well as to identify the slope of the demand for loans function. The results indicate that soft market imperfections, operating costs and systemic risk are the main determinants of the spread.