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									as dozens of companies postponed or canceled plans                                        Wall Street investor
to go public. Thus far, the prospects for 2009 are even        corruption                 Bernard Madoff revealed
worse. As foreign investors reallocate capital to cover        shAkeup                    that he had misled inves-
losses in other markets and global liquidity remains                                      tors by investing an esti-
scarce, Latin American issuers have been punished.                                        mated $65 billion in the
The financial crisis has exerted substantial down-                                        largest Ponzi scheme in
ward pressure on asset prices and has curtailed issu-                                     history. The scandal had
                                                               by Danielle Renwick
ance of new corporate securities in the short term. It                                    ripple effects throughout
remains to be seen whether this will cause a whole-                                       Latin America: Spain’s
sale retrenchment of the progress achieved during            Protests spread through      Banco Santander, one of
the five years preceding the crisis.                         Colombia last November       the largest banks in the
                                                             when thousands of small      region, lost an estimated

Who Will                                                     investors discovered
                                                             that their life savings
                                                                                          $3.1 billion in Madoff
                                                                                          investments. Similarly,

Bounce Back?                                                 had vanished in pyramid
                                                             schemes. Losses totaled
                                                                                          Chile’s Celfin Capital SA
                                                                                          and Peru’s largest finan-
Not surprisingly, capital continues to gravitate toward      nearly $1 billion, with      cial-services company,
growth. While there has been a substantial decelera-         most concentrated            Credicorp Ltd., revealed
tion of overall economic growth across the region,           around David Murcia          they too had invested
prospects in the leading economies of Latin Amer-            Guzmán’s D.M.G. Grupo        millions with Madoff.
ica remain strong compared with the negative pro-            Holding. The scandal put        Similar schemes were
jections in the mature markets of the United States,         President Álvaro Uribe       exposed elsewhere. In
Europe and Asia.                                             under fire for perceived     south Florida, the Securi-
    Despite months of successive downward revi-              loose regulation, and        ties and Exchange Com-
sions, consensus GDP growth estimates for Brazil,            sparked riots that left at   mission (SEC) filed suit
Chile and Colombia remain close to 2 percent, and            least two dead.              against Haitian-Amer-
projections for Peru still approach 5 percent. Demand           Only weeks later, in a    ican investor George
in capital markets serves as a barometer for such            fraud similar in design      Theodule for swindling
growth. Despite very limited global appetite for new         but much larger in scale,    investors from the area’s
securities, Brazil and Colombia issued bonds in Janu-
ary 2009 for $1 billion each, and Chile and Peru both
have large issuances planned for the first quarter of
this year. Quasi-sovereigns such as Codelco, Petro-       bonds has been limited to those countries that have
bras and Pemex have all conducted large bond issu-        achieved investment-grade status, rewarding those
ances this year, demonstrating further that Latin         economies that were managed well in the years pre-
American blue-chip debt securities are able to com-       ceding the cris
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