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2010
Americas Center Annual Review

FEDERAL RESERVE BANK OF ATLANTA

A Note from Senior Vice
President Mike Johnson
Since joining the Atlanta Fed as senior vice president of
supervision and regulation at the start of 2010, following
many years within the Federal Reserve System, I’ve had
the opportunity to observe even more closely the work of
the Atlanta Fed’s Americas Center. As described in this
Annual Review, the Center had another outstanding year
as its staff and external partners collaborated on a range
of programs and activities related to four key themes:
•
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Enhancing service while reducing the costs of payment processing within the Americas
Broadening and deepening access to consumer banking products and services as well
as financial education through community outreach programs
Through important working relationships with regulatory partners, doing our part to
further build the effectiveness of best practices for U.S. and region-wide consolidated
supervision
Improving our understanding of the economic, financial, and political dynamics driving
change in the Americas through various research initiatives and forums

To highlight some of the Americas Center’s key accomplishments, we have made progress
in responding to increasing customer demand for low-cost, efficient cross-border payment
vehicles. For example, FedGlobal® ACH Payments now offers a broad array of services to
an increased number of countries in Latin America and Europe. As for banking supervision,
we have purposefully built, over 15 years, a track record of continuous, consistent, and
collaborative multilingual foreign technical assistance programs in an expanding variety
of supervisory disciplines to central banks, banking superintendencies, and multilateral
organizations throughout the region. Underpinning all of our work are ongoing efforts to
better understand individual country and regional fundamentals and their interaction with
global developments. In this regard, it goes without saying that the Center could not fulfill
its core mission without the active interest and participation of our many external partners
representing academia, financial institutions, regulatory and governmental agencies, and
community groups.
These working relationships are fundamental to the Center’s overall success as we
look forward to a new year of exciting work in 2011. One upcoming initiative is our
consumer banking conference, Strengthening the Financial Safety Net in Emerging
Markets. Amid robust economic growth in Latin America there is untapped potential
within the unbanked and underbanked populations. Here in the United States, we are

also interested in bringing more individuals into mainstream and closely regulated
financial institutions and away from alternative service providers. It is our intent that
these meetings and other work supporting our strategic themes will serve to promote
sound financial education, provide low-cost financial service alternatives, improve the
penetration of useful banking products and services, and foster more institutional and
personal financial stability and economic development.
From its inception in 2005, the Americas Center has been a clearinghouse of ideas. So, as
interested as we are in having you read the 2010 Americas Center Review, we are equally
interested, if not even more interested, in engaging with you about your ideas to further the
work of the Americas Center. I hope this Annual Review helps to stimulate your ideas, so
please contact us any time. We look forward to hearing from you.

Mike Johnson
March 2011

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AMERICAS CENTER 2010 ANNUAL REVIEW

The Americas Center’s Purpose
The Americas Center, launched in 2005, is a cooperative initiative among the Federal Reserve
System’s Retail Payments Office, based in Atlanta, and the Atlanta Fed’s Supervision and
Regulation, Research, and Operations and Administrative Services divisions. The Americas
Center provides a framework for collaboration among Bank staff whose responsibilities relate to
the Americas. This collaboration enables the Bank to more efficiently leverage its strengths and
integrate its resources to serve internal and external constituencies through a wide variety of
initiatives. These include sponsorship of policy conferences, analysis of key regional banking and
economic trends in the area, exchange programs, technical assistance, and public outreach and
educational activities.

Our vision: The Americas Center is a clearinghouse of ideas and
initiatives that support the Sixth Federal Reserve District and the
Federal Reserve System and their connections to the Americas and
Spain. We contribute to informed policies and practices that respond
to the changing dynamics in Latin American, Caribbean, and Spanish
financial institutions and markets. We bring thought leadership to the
areas of critical emerging policy and regulatory issues that are of vital
interest to our Bank’s mission.
—Americas Center Strategic Plan

AMERICAS CENTER 2010 ANNUAL REVIEW

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Highlights
This Annual Review highlights the Americas Center’s most significant projects, products,
programs, and initiatives in 2010. We invite you to visit our website to learn more. These
achievements reflect the accomplishments of committed people from throughout our
organization, often in partnership with colleagues from other institutions.
Improving service and reducing the costs of payment processing within the Americas
As global business is expanding, the Federal Reserve Banks are keeping pace with customer
demand for low-cost, efficient cross-border payments. FedGlobal® ACH Payments delivers a
range of payment options to help meet this demand, combining convenient access with robust
customer support.
New countries, currencies, and payment options were the focus of the Retail Payments
Office FedGlobal ACH Payments in 2010. Critical enhancements included adding an Account
to Receiver (A2R) payment option for U.S. financial institutions to be able to participate in
the global remittance market. A2R allows banks and credit unions to send payments from
their customers to unbanked receivers abroad. The new payment option reaches Argentina,
Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Mexico, Nicaragua, Peru, and Uruguay.
Launching the A2R service was a collaborative effort among the Federal Reserve Banks,

Sixth District Cash Operations
The Miami Branch of the Federal Reserve Bank of Atlanta serves as one of the two primary Fed offices that help
satisfy global demand for the U.S. dollar currency notes and coin. As a gateway to the Americas, Miami provides
cash services to 36 countries in Latin America and the Caribbean, making dollar payments to and accepting
dollar deposits from financial institutions throughout the region, including several central banks. International
cash services contribute 50–60 percent of Miami’s total cash volume, and about 16 percent of the total
Sixth District volume.
The value of U.S. currency payments to international endpoints in 2010 increased by 37 percent over 2009,
driven largely by high demand in Argentina during the political and institutional crisis precipitated by President
Fernandez Kirchner’s decision to use central bank reserves to make sovereign debt payments. In contrast, currency
deposits to the Miami Branch declined by 4 percent from the previous year, continuing a trend begun in 2009 that
illustrates the impact of reduced remittance flows into Latin America as a result of migrant worker job losses.

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Banco de Mexico, MicroFinance International Corporation in the United States, and Banco
Rendimento in Brazil. FedGlobal also launched a new, bidirectional service to 22 European
countries with Equens, a pan-European payments provider, and DZ Bank in Germany. The
Europe service features payments in U.S. dollars, euros, British pounds, and Swiss francs.

The service also marks the first live implementation of the business model created by
the International Payments Framework Association (IPFA), an international
group formed to standardize the exchange of nonurgent, cross-border credit transfers.
The Atlanta Fed cosponsored the second Directo a México Jornada in 2010. The event
featured materials designed to enhance participants’ knowledge of factors influencing the
sending and receiving side of payments, including banking regulations, payment options,
and customer needs. The keynote address featured Donald Terry, formerly the head of
the Multilateral Investment Fund at the Inter-American Development Bank. Attendees
visited the Mexican Consulate in Atlanta to learn about consular services for Mexicans
abroad and opportunities for collaborating with U.S. financial institutions. They also viewed
the process of obtaining a Matrícula Consular de Alta Seguridad, or consular identification
card. Cosponsors with the Atlanta Fed were Banco de Mexico, the Institute of Mexicans
Abroad in the Mexican Foreign Ministry, and Bansefi.
Broadening and deepening access to consumer banking products
and services, financial education, and community outreach programs
The Central Bank of Brazil and Instituto Palmas, a community development bank in Brazil,
invited the Americas Center to participate in a forum to discuss community development
banking. Ana Cruz-Taura, regional community development director with the Atlanta Fed’s
Community and Economic Development function, spoke on two panels during the conference,
presenting an overview of the U.S. community development finance network and the role of
financial education in supporting access to banking. Latin American and U.S. banking and
community development professionals are equally interested in providing access to responsive
and responsible mainstream bank products for the previously unbanked and underbanked.

AMERICAS CENTER 2010 ANNUAL REVIEW

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Access to emergency funds and financial services was also a major consideration in Haiti
following the January 2010 earthquake. The Atlanta Fed, working through Community
and Economic Development, became an active partner in disaster response and planning
for the large Haitian-American diaspora located in South Florida. For example, when the
U.S. Department of Homeland Security granted temporary protected status (TPS) to Haitian
nationals who had been in the United States since before the earthquake, the Americas
Center posted a TPS Fact Sheet that provided information to individuals, community groups,
and financial institutions about the immigration status granted by TPS and the resulting
access to U.S.-issued identification and financial services.
The Americas Center undertook other activities related to the earthquake response
and the Haitian-American community, including organizing meetings regarding the reestablishment of central bank functions and introduction of mobile banking services,
inclusionary community planning and disaster recovery, rebuilding contract opportunities
for Haitian-American businesses, and social service network collaboration to meet
emerging needs of Haitians in South Florida.
The Center participated in a range of other outreach activities. Atlanta Fed economists
presented their research at the central banks of Argentina and Bolivia, and economists
from the central banks of Chile and Brazil visited the Atlanta Fed. A delegation from
Brazil’s Institute for Applied Economic Research spent three days visiting the Atlanta
Fed’s research department. Professor Tapen Sinha of the Instituto Tecnológico Autónomo
de México (or ITAM) in Mexico City spent part of his sabbatical year at the Atlanta Fed.
The Americas Center hosted two state department delegations from Latin America and the
Caribbean and an industrial financial group from China visiting the Miami Branch. It also
hosted an event for delegates to the 2010 Americas Competitiveness Forum in Atlanta.
Working with partners to build the effectiveness of
U.S. and region-wide consolidated supervision
The chief responsibilities of the Atlanta Fed’s Foreign Banking Organization (FBO) Analysis
Team, a part of international supervision, are understanding the home country economic-

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AMERICAS CENTER 2010 ANNUAL REVIEW

political-financial system operating environment and determining a “strength-of-support
assessment” (SOSA) by foreign parent banks, primarily originating from Latin America
and Spain, for their U.S. operations. In executing these responsibilities, team members
travel throughout South and Central America and Spain conducting meetings with the head
offices of foreign banks with operations in the United States, foreign central banks, banking
superintendencies, banking associations, rating agencies, and local offices of major U.S.
banks. During 2010, FBO visits were conducted in Brazil, Costa Rica, Colombia, Peru, and
Spain. Beyond executing the SOSA responsibility, these visits also serve very useful outreach
purposes.
Additionally, Atlanta Fed staff worked closely with the Board of Governors serving as bilingual
instructors on foreign technical assistance (FTA) missions for classes held in the United
States and abroad and attended by foreign regulators. These classes were held in Lima, Peru;
Miami, FL; Buenos Aires, Argentina; Mexico City, Mexico; and the Cayman Islands, as well
as several international schools in Washington, DC. Fed representatives also spoke at the
Financial Action Task Force of South America meeting in Lima, Peru, and participated in antimoney-laundering conferences in Medellin and Cartagena, Colombia. Some local outreach
activities included conducting web-based courses for members of the Florida International
Bankers Association (FIBA) on trade finance.
Better understanding the economic and financial
dynamics driving change in the Americas
In October, the FBO team in conjunction with FIBA hosted the Americas Center breakfast
forum, Southeastern U.S. Regional Economic Outlook and Regulatory Reform Update. An
Atlanta Fed economist and a DC-based regulator provided insights and views on the South
Florida economy, focusing on international trends and perspectives as well as the implications

The Changing Economic and Political Landscape
In December, the Americas Center and the Center for Hemispheric Policy at the University of Miami cohosted a
conference on The Changing Economic and Political Landscape in Latin America: Outlook for 2011. An audience
of 80 professionals convened to hear panelists Paulo Leme (Goldman Sachs), Claudio Loser (Centennial Group),
Rafael de la Fuente (UBS), Lilian Rojas-Suarez (Center for Global Development), and Susan Kaufman Purcell
(University of Miami). Atlanta Fed First Vice President Patrick Barron presented opening remarks. The panelists
focused on risks to the outlook as they discussed a number of key topics, including the sustainability of the
region’s current economic growth pattern, trends in foreign currency valuation, and the potential economic impact
of Brazil’s recent oil discoveries.

AMERICAS CENTER 2010 ANNUAL REVIEW

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of regulatory reform for the international banking sector. The forum provided an opportunity
for dialogue between international bank representatives in the Miami community and
supervision and regulation staff on a timely topic.
In November, the Center cohosted a research workshop with the American Society of
Hispanic Economists on economic issues affecting the Hispanic community. Economists
from throughout the country presented papers on topics that included education, income
distribution, immigration, and remittances. Highlights of the conference included
“Immigration and Child-Care Patterns Among College-educated Mothers in the U.S.:
Evidence from Time-Use Data,” by Catalina Amuedo-Dorantes and Almudena Sevilla Sanz,
and “Assimilation and Cohort Effects beyond the Labor Market: Time Allocations of Hispanic
Immigrants to the U.S.,” by Andres J. Vargas and Manuel Chavez.
In December, the Americas Center and Mercer University’s Stetson School of Business
cohosted the fourth annual Southeastern International/Development Economic Workshop in
Atlanta. The meeting, which began in 2007 as a workshop for researchers from Atlanta-area

Remittances and Immigration Conference
Economists from leading universities convened at the Atlanta Fed to discuss new research on remittances and
immigration. One of the highlights of the conference was a paper by University of California, Davis professor
Giovanni Peri, who argued that unskilled immigrant labor helps prevent U.S. firms from relocating offshore.
Peri concluded that immigration generates cost-savings for U.S. firms and thus a corresponding increase in
productivity, so immigration’s aggregate effect on the level of low-skilled native employment in the United
States is positive. This finding contrasts with research conducted by George Borjas of Harvard University,
who also participated in the conference. Borjas suggested that immigrants with similar skill levels tend to be
substitutes rather than complements for native workers.
Another presentation looked at remittance flows, which can generate billions of dollars in fees. Dean Yang from
the University of Michigan quantified the impact of money transfer fees on remittances flows. Using a unique
field experiment among Salvadoran migrants in the Washington, DC, area, Yang randomly assigned discounts
on remittance transactions fees to migrants. Surprisingly, minor reductions in remittance fees led to large
increases in total transfers. For instance, a $1 reduction in transaction costs generated $25 more remitted per
person per month. Yang said this finding suggests that a reduction in transaction costs can lead to very sizable
gains in recipient countries.
Other papers included new research aimed at quantifying the effect of female migration on children left
behind, the role of sponsorship on immigration, the impact of immigrants on the educational attainment of
natives, the productivity gains from skilled migration into the United States, and the role of seasonal migration
in mitigating famine in Bangladesh.

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universities, has become more widely known, and now attracts interest from economists
throughout the world. The number and quality of abstracts have also increased each year.
A highlight from this year’s conference included “Economic Shocks and Civil Conflict:
Evidence from the Constraints of the Open-Economy Trilemma,” a paper by Peter Hull and
Masami Imai exploring the impact of short-term economic shocks upon the political and
economic performance of ethnically divided states. Georgia State University graduate student
(and Americas Center intern) Gustavo Canavire-Bacarezza presented “Ethnic Wage Gaps
in Segmented Labor Markets,” another notable paper. Using household survey data from
Bolivia, Brazil, Guatemala, and Peru, Canavire-Bacarezza estimated and analyzed wage gap
distributions among ethnic groups over time in informal and formal markets, and examined
factors that explain their differences.
Americas Center dissertation internship
Each year, the Americas Center invites doctoral candidates writing dissertations on
economic topics directly linking to Latin America and the Caribbean to apply for the
Americas Center summer dissertation internship. The student is expected to make
significant progress on his or her dissertation during an eight-week tenure at the Bank.
The student must also make two formal research presentations and be available for
consultation with staff from the Research Department and other areas of the bank.
The 2010 dissertation intern was Cesar Sosa Padilla Araujo of the University of Maryland,
whose dissertation analyzes sovereign defaults. While in residence at the Atlanta Fed,
he looked at the role of domestic debt on the cost of sovereign defaults and worked on
a paper on a sovereign default framework that quantifies the importance of the debt
dilution problem in accounting for overborrowing and sovereign default risk.

AMERICAS CENTER 2010 ANNUAL REVIEW

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Americas Center Advisory Council
Catalina Amuedo-Dorantes
Professor, Department of Economics
San Diego State University
Kenneth Coates
Economist
Martin Eichenbaum
Ethel and John Lindgren
   Professor of Economics
Northwestern University

Jeffry Frieden
Stanfield Professor of International Peace
Department of Government
Harvard University
Susan Kaufman Purcell
Director, Center for Hemispheric Policy
University of Miami

Structure
Americas Center Coordinator
Stephen J. Kay
Coordinator of Latin America Analysis
Research Department

Carolyn Healy
Assistant Vice President
International/Community Banking    
Supervision

Steering Committee
Michael J. Chriszt
Director, International and
Regional Analysis
Research Department

James M. McKee
Senior Vice President
Retail Payments Office

Thomas J. Cunningham
Vice President,
   Associate Director of Research,
   and Regional Executive
Research Department

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Robert Schenck
Vice President
International Banking Supervision

AMERICAS CENTER 2010 ANNUAL REVIEW

Some members of the Americas Center staff (left to right): Laurel Graefe, James McKee, Stephen Kay, Thomas Cunningham,
Carolyn Healy, Elizabeth McQuerry

Liaisons
Ana Cruz-Taura
Regional Community
   Development Director
Community Affairs
Miami Branch
Laurel Graefe
Senior Economic Analyst
Research Department
Paul Graham
Assistant Vice President
Miami Branch
Nancy Jaimes
Director, Foreign Bank Analysis
International Banking Supervision
Miami Branch

Sandy Juárez
Senior Project Leader
District Cash Function Office
Operations and Administrative Services
Roxana Maneiro
Senior Foreign Banking
Organization Analyst
International Banking Supervision
Miami Branch
Elizabeth McQuerry
Assistant Vice President
Retail Payments Office
Federal Reserve Financial Services
Carolyn San Martin
Senior Foreign Banking
Organization Analyst
International Banking Supervision
Miami Branch

AMERICAS CENTER 2010 ANNUAL REVIEW

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Americas Center
1000 Peachtree Street, N.E.,
Atlanta, Georgia 30309-4470
frbatlanta.org/americascenter/