1 REGIONAL MONETARY COOPERATION IN LATIN AMERICA

Latin American has the longest history of regional integration efforts in the developing world. They go back to the 1950s, when the initiatives to create a Central American Common Market and a broader Latin American integration process were launched. The treaties for both of them were signed in 1960, although in the second of these cases only as a framework for partial bilateral and subregional agreements among its members –the Latin American Free Trade Area (LAFTA), later transformed into the Latin American Integration Association (LAIA or ALADI according to its Spanish acronym). Two subregional agreements were created within this framework: the Andean Community (formerly Andean Group) in 1969 and the Common Market of the South (MERCOSUR for its Spanish acronym) in 1991. These integration processes were also the context in which different forms of regional financial cooperation were born. They include LAIA’s clearing system for intraregional payments still in place, and the former clearing system and associated stabilization fund of Central America, the only regional financial institutions that have failed. They comprise two successful development banks created within the context o