Abstract:
The benefits of deeper, broader and more diversified capital markets are, in theory, well-established. The primary purpose of capital markets, or the buying and selling of equity and debt instruments, is to serve as a conduit for the transformation of savings into investment for the real sector, thus constituting an alternative to bank financing.

Markets also serve as a mechanism through which risk is transferred, and risk exposure diversified, enabling financial intermediaries to manage risk more efficiently. Deeper and more liquid capital markets, along with a large investor base, can lead to effective price signalling mechanisms and reduced transaction costs via frictionless trading in the secondary market.

Within the context of Latin America, could efficient capital markets play an essential role in achieving the wider socio-economic goals of the region?

Broadening and deepening capital markets via regional integration initiatives may, in theory, create a number of positive outcomes: greater investment and growth by disconnecting investment from domestic savings rates and unlocking cross-border capital flows; financing to address the region’s infrastructure needs; financial stability in a region where volatility has historically been prevalent; development and diversification of a private sector that remains commodity-dependent and often crowded out by government investment.

Academically, these gains are relatively well-established, if not unilaterally accepted. But do they translate into reality? This paper explores the possibility for and applicability of capital markets integration in Latin America, precisely the economies of Mexico, Chile, Colombia and Peru.

It explores three main channels:

1. Assess whether there is scope for regional integration in Latin America. Identify the key drivers for regional integration by reference to other integrating regions (Europe, Asia, East Africa), and assess the applicability of these trends to Mexico, Chile, Colombia and Peru.
2. Identify the principal risks and rewards of capital markets integration, and analyse how they apply to these four economies
3. Assess whether a gap exists between the theoretical model of integration and the reality within the region.
4. If challenges and barriers to integration exist, what policy initiatives can and should be undertaken to address them?

Resumen:
No disponible

Institutional Authors: Inter-American Development Bank and Columbia University
Authors: Mario Campa, Sebastian Essl, Muhammed Gundogdu, Caitlin Page, Hongrui Zhang, Liting Zhao
Spanish Title: Regional Capital Markets Integration in Latin America: Mila & Beyond
Full document: Campa, Regional Capital Markets Integration in Latin America- MILA and Beyond

Brief:
This is a 2015 edited contribution by Universidad CESA and Universidad del Desarrollo. The book delves into more detail on the achievements that the PA has made up to this point and also touches on particular aspects of the PA, including contributions on particular countries such as Chile and Peru. The chapter by Edgar Vieira is worth exploring since it provides interesting insights from a theoretical and practical point of view. Some general recommendations on steps forward come from the contributions while a strong economic focus on their analysis persists in most of the chapters. The publication encompasses ten chapters and the introduction by the editors.

Resumen:
No disponible

Editors: Isabel Rodríguez Aranda and Edgar Vieira Posada
Spanish Title: Perspectivas y Oportunidades de la Alianza del Pacífico
Full document: Not available (Editorial CESA, 2015)

Abstract:
Not available

Resumen:
La obra parte de una visión general y abarcativa del nuevo proceso en la historia de la integración latinoamericana y caribeña. Se le considera en términos formales como un compromiso de amplio alcance (Gazol Sánchez) que plantea varios interrogantes hacia su interior y en relación con terceros países. Esta perspectiva continúa en el capítulo siguiente y se lo concibe como una de las últimas estrategias alternativas en materia comercial dentro del actual contexto global, que intenta crear un eficiente corredor comercial vía Pacífico desde un enfoque latinoamericano (Romero León – Lascuraín Fernández).

Luego, se examinan dimensiones más particulares, dentro de las cuales, surgen problemas críticos. Una de las problemáticas específicas deriva de los aspectos políticos y geopolíticos de la propuesta de convergencia Alianza del Pacífico-Mercosur y los límites que presenta. En cuanto a lo político, Giacalone señala como positivo la promoción del diálogo, la búsqueda por hacer incluyentes los acuerdos existentes y la disminución del lenguaje nacionalista, como también la confrontación ideológica.

Geopolíticamente ambos se necesitan, uno se halla en la ribera pacífica y el otro, en el atlánticocaribeño; uno tiene mayor número de acuerdos comerciales vigentes, que facilitan la inserción productiva global y la atracción de IED, y el otro, mayor fortaleza industrial y variedad de productos para exportar. En consecuencia, la convergencia no solo amplía las opciones económicas y la negociación de los conflictos internos, sino también daría a la región una mayor proyección externa, dentro de un ámbito global que busca articularse en mega-acuerdos regionales. Continue reading

Abstract:

This book delves into the Pacific Alliance from different perspectives, including the realms of foreign diplomacy, economy, politics and technological aspects, whilst analysing the opportunities that may occur during this process of regional integration. […]

In short, this book aims to present a deep and meticulous analysis of what the Pacific Alliance is so far. Beyond delving into an informed explanation of the process of regional integration, the book tries not only to offer a landscape of untapped opportunities that may potentially contribute to the success of the Pacific Alliance but also to make serious recommendations in areas that may present substantial challenges for the Pacific Alliance.

Edited book with 15 contributions from several authors

Resumen:
No disponible

Editors: Mario Torres Jarrín and Jonathan Violante Pica
Full document: 2016, Torres & Violante, Emerging Markets-The Pacific Alliance

Abstract:
Significant opportunities exist for deeper integration. To achieve these more challenging elements, the pact will need more time to deliver. For example, despite the foundation built by the Mercado Integrado Latinoamericano (MILA), financial integration has been underwhelming, and regulatory harmonisation remains incomplete. Issues pertaining to pension funds, bank accounts, the joint financing of development projects, and obstacles in capital flows must be addressed.

All four member countries pursue liberalised trade in an effort to move away from commodity reliance, yet, as slumping commodities yield decelerating growth, more attention must be paid to export diversification. Both observer countries and member states still wrestle with how to harness the potential of such an impressive coalition, and deeper energy integration remains one of the greatest opportunities for the Alliance.

These challenges point to the Alliance’s still untapped potential. Chile, Colombia, Mexico, and Peru have picked some of the “low-hanging fruit” of regional integration. Now, the next stage begins. This means reaching for the higher, more difficult—yet ultimately more fulfiling—levels of collaboration. It is crucial to establish milestones—three, five, and ten years out—to maintain momentum.

Over the course of the last year, we held two private roundtables featuring global leaders from the public, private multilateral, and academic sectors. In particular, this network called attention to opportunities in financial, energy, and commercial integration. The group also discussed the Pacific Alliance’s potential as a regional leader and global player, with a specific emphasis on making use of the pact’s diverse observer countries.

This document reflects the outcome of our dialogues—both as a group and bilaterally.

Resumen:
No disponible

Authors: Jason Marczak, Samuel George, María Fernanda Pérez Argüello and Andrea Saldarriaga Jiménez
Institutional Author: Bertelsmann Foundation
Full document: 2016, Marczak & George, Pacific Alliance 2.0

Summary:
The Pacific Alliance (PA) is a pragmatic and dynamic integration process whose members—which currently include Chile, Colombia, Mexico, and Peru—seek the free circulation of goods, services, capital flows, and people among them, as well as cooperation in a wide variety of other areas. The PA subscribes to the modern view of “open regionalism,” because it promotes trade and capital flows with other regions—in particular, with East Asia and Mercosur—and it remains open to new members. Several other Latin American countries have indicated their potential interest in the PA, and Costa Rica is currently advancing in the process of joining.

Financial integration is, thus, one of the PA’s primary goals. Financial institutions within the region, in particular of emerging financial multilatinas, already have important cross-investments.

But the best-known development so far in this area is the Mercado Integrado Latino Americano (MILA) platform, partial integration of the four current PA members’ stock exchanges.

This paper discusses, first, why financial integration, and in particular capital market integration, may provide substantial benefits to the PA’s members, especially in the current external environment.
It then focuses on the potential for the integration of capital markets within the region and on how a significant push toward regulatory harmonisation can contribute to meeting this goal and reenergizing MILA.

Resumen:
No disponible

Author: Guillermo Perry
Full document: 2016, Perry, Financial Integration in the Pacific Alliance

Abstract:
This paper describes the changes in ownership and internationalisation of the brokerage firms in Colombia as a result of the regional integration process of its stock exchange market through the Latin American Integrated Market (MILA). It proposes that the integration of stock exchanges generated transformations within the brokerage sector. Affected companies in response pursue different strategies to remain competitive in the current state of affairs. In the case of Colombia, stock exchange integration through MILA has resulted into mergers between local brokerage firms, acquisitions from both national and international companies and changes in ownership.

Resumen:
Este artículo describe los cambios de titularidad y la internacionalización de las compañías de corretaje colombianas, como resultado del proceso de integración regional de su mercado bolsista, a través del Mercado Integrado Latinoamericano (MILA). El documento propone que la integración de las bolsas ha generado transformaciones dentro del sector de los corretajes y que, en respuesta, las empresas afectadas persiguen diferentes estrategias para seguir siendo competitivas dentro de la situación actual de los negocios. En el caso de Colombia, la integración de la bolsa a través del MILA ha originado fusiones entre los corretajes locales, adquisiciones por parte de empresas nacionales e internacionales y cambios de titularidad.

Authors: Beatriz Yepes-Rios, Kelly Gonzalez-Tapia and Maria Alejandra Gonzalez-Perez
Spanish Title: Integración de las bolsas de valores: el caso del Mercado Integrado
Latinoamericano y su impacto sobre el estatus de titularidad e internacionalización de las compañías de corretaje colombianas
Full document: 2015, Yepes, Integración de las Bolsas de Valores- el caso del MILA y su Impacto sobre el Estatus de Titularidad e Internacionalización de las Compañías de Corretaje Colombianas

Abstract:
The Latin American Integrated Market agreement between Peru, Chile, Colombia and Mexico was signed within the framework under the Pacific Alliance, following the experiences of the European Union and integrated Asian and Middle Eastern markets. This agreement was aimed at diversifying markets and attracting global investors. We identify the impacts on returns and volatility at the main stock indexes for each of MILA member countries through the application of correlation and cointegration analyses, and using the impulse response function of vector autoregression (VAR).

Resumen:
El Acuerdo del Mercado Integrado Latinoamericano (MILA) suscrito entre Peru, Chile, Colombia y Mexico fue suscrito en el marco de la Alianza del Pacífico, siguiendo la experiencia de la Union Europea y los procesos de integración en Asia y Medio Este. Este acuerdo busca diversificar los mercados y atraer inversionistas del resto del mundo. Mediante análisis de correlación y cointegración, ademas de fiunciones impulso-respuesta de vectores autoregresivos (VAR), idenficamos los impactos en los retornos y en la volatilidad de los principales indices para cada uno de los paises miembros del MILA.
Palabras Clave: Integración financiera, cointegración, volatilidad.

Authors: Jaime Rojas-Mora and Julio César Chamorro-Futinico
Full document:2016, Rojas & Chamorro, Dinámica y Volatilidad en los Indices Bursátiles de los Países de la Alianza Pacífico