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Americas Center Annual Review

Federal Reserve Bank of Atlanta

A Note From Vice President

Michael Chriszt
As Latin America’s ties to the Sixth Federal
Reserve District have grown, so too has the scope
of activity of the Atlanta Fed’s Americas Center.
As someone who has worked with the Americas
Center since its inception in 2005, I have had
the opportunity to watch it develop into a thriving
Bank-wide strategic initiative that enables staff
to collaborate, often with external partners, on a
wide range of programs.
When we started the Americas Center, we sought
to bring thought leadership to the critical emerging policy and regulatory areas that are of vital
interest to our Bank’s mission. In 2012, three
examples of achievements that reflect this leadership include:
• The Retail Payments Office’s role in supporting the Western Hemisphere Payments
Initiative’s goal of establishing a regional
payments hub, that, if implemented, would
link many of the hemisphere’s central
banks’ payment systems.
• An international stakeholders’ meeting
hosted by the Americas Center that brought
together leaders from governments, multilateral organizations, and nongovernmental
organizations (NGOs) to discuss how credit
can be expanded through secured transaction reform.
• An Americas Center forum held with leading
business and academic experts on the
growing commercial and economic ties
between the United States and Mexico.
In addition to the higher-profile initiatives that you
will read about in this Annual Review, the Atlanta
Fed is responding to new challenges in the region.

In banking supervision, staff representing various
areas of expertise built upon their successful
track record of collaborative, multilingual foreign
technical assistance programs. The Country Risk
and Foreign Banking Organization (FBO) Analysis
team continued its efforts to build key working
relationships and better understand country and
regional banking sector risk fundamentals and
their linkages to global developments. Sixth District Cash Operations, which serves 35 countries
in Latin America and the Caribbean from the
Miami Branch, rose to the challenges presented by
Superstorm Sandy and stepped in to support its
Fed System colleagues. The community and economic development team continues its work with
unbanked and underbanked consumers, and the
Bank’s Retail Payments Risk Forum, which focuses
on improved detection and mitigation of emerging risks and fraud in retail payments systems,
focused on reaching out to partners throughout
the hemisphere.
In 2012, the Americas Center worked with Atlanta
Fed, Federal Reserve System, and public and
private stakeholders to provide leadership in key
supervisory, financial, and economic matters related to the Americas. As we look ahead to 2013,
the Americas Center will continue to build upon
this foundation. ■

The 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 center provides a framework for collaboration among Bank staff whose responsibilities relate to the Americas
and Spain. This collaboration enables the Bank more effectively to leverage its strengths and integrate its resources to serve internal and external
constituencies through a wide variety of initiatives. These efforts include
sponsoring policy conferences, analyzing key regional banking and economic trends in the area, participating in exchange programs, furnishing technical assistance, and conducting public outreach and educational activities.
“Our vision: The Americas Center will contribute to informed policies and practices that
respond to the changing dynamics in Latin
American, Caribbean, and Spanish financial
institutions and markets. The center will bring
thought leadership to the critical emerging
policy and regulatory areas that are of vital
interest to our Bank’s mission.”


Sixth District cash operations
The Miami Branch of the Atlanta Fed serves as one of two primary Fed offices that help satisfy
global demand for U.S. banknotes and coins. The Miami Branch services 35 countries in Latin
America and the Caribbean, making dollar payments to and accepting dollar deposits from
financial institutions throughout the region, including several countries’ central banks. International cash services contribute 50 percent of the Miami Branch’s total cash volume. In 2012, the
Miami Branch received currency orders from New York Fed customers affected by airport and
road closures during Superstorm Sandy. Consequently, the Miami Branch paid more than $1.3
billion to international correspondents from October 29 to November 1.
During 2012, the Miami Branch also hosted various international bankers and central bank
Providing a leadership role in payments and facilitating bancarization for underserved consumers
FedGlobal® ACH sponsored a number of outreach efforts throughout the year to encourage use
of the Directo a México service. This service helps U.S. financial institutions gain a greater share
of the U.S.-to-Mexico remittance market. These efforts promoted awareness of the potential of
the remittance market for financial institutions and coordinated efforts among our partners—including the Central Bank of Mexico, the Institute for Mexicans Abroad, the Federal Deposit Insurance Corporation, and the U.S. Department of the Treasury—to support underserved consumer
markets through the Directo a México service. The community and economic development team


helped promote this initiative and facilitated
support from the Board of Governors.

Roundtable on Mexico
On April 12, the Americas Center and the World
Affairs Council of Atlanta cohosted a roundtable
called “Bridging the Border: Reinforcing Ties between the U.S. and Mexico.” The panel explored
the long-standing relationship between the
United States and Mexico, two countries bound
by history, geography, and trade.

Among other notable events, the Directo a México service was also featured during the national
opening of the Financial Education Week at the
Mexican Consulate in New York. Members of
the press, community advocates, and financial
institutions participated in the event. The Central Bank of Mexico and Mexican Consul Carlos
Sada highlighted the importance of the Directo
a México service in helping with bancarization
and reducing the costs of remittances for the
underbanked Mexican population.

Mexico has experienced a decade of relative stability, thanks to a series of fiscal and
monetary reforms, explained Ed Skelton, a
business economist at the Dallas Fed. Those
reforms include central bank independence,
fiscal discipline, and the adoption of a formal
inflation target.

The Atlanta Fed team also met to coordinate
future outreach efforts with the Mexican
Ministry of Foreign Affairs in Mexico City. Other
outreach efforts included a presentation on
central banks’ best practices at the U.S. Agency
for International Development (USAID) and a
U.S. Treasury-sponsored conference in Manila
on global financial inclusion. Central banks from
around the world attended the event.

Professor Jennifer McCoy of Georgia State
University and the Carter Center spoke about
the prospects for Mexico’s elections, as well as
the country’s foreign policy in the hemisphere.
The country’s electoral system has undergone
extensive reforms, making it one of the most
impartial systems in the world, said Robert Pastor, director of American University’s Center for
North American Studies. Pastor argued that it is
time for the United States, Canada, and Mexico
to refocus on the hemisphere, where trade relations have stalled since 2001.

Developing effective U.S. and regionwide consolidated supervision best
In 2012, the Country Risk and FBO Analysis
unit, an integral part of the Atlanta Fed’s
International Supervision and Regulation
Department, conducted in-country visits to
Spain, Brazil, Colombia, Peru, and Costa Rica.
These visits support International Supervision’s
core responsibilities under the Foreign Bank
Supervision Program. Supervision staff met with
regulatory counterparts and head office FBO
management in the various countries.

As Mexico’s economy and financial system have
grown more stable and robust, so too has its
importance as a U.S. trading partner. Jorge
López Pérez, regional director–North America
for the trade promotion agency ProMéxico,
described the relationship between the United
States and Mexico as a big, tight knot, with the
two countries’ economic and financial systems
having become stronger and more intertwined.

Bank representatives also participated in two
supervisory colleges hosted by the Bank of
Spain and the Central Bank of Brazil, which
were attended by various regulatory agencies
from around the world. The topics discussed

Highlights from the conference and an interview
with Robert Pastor are posted on the Atlanta
Fed’s YouTube channel. ■


were evolving regulations in the host countries—the United States (for the Dodd-Frank Act) and
internationally (for Basel III).
The FBO unit at the Miami Branch hosted visiting examination teams from the Central Bank of
Brazil and the banking superintendencies of Costa Rica and Peru. These opportunities to meet
with regulatory counterparts support the Americas Center’s mission to build solid working relationships across Latin America and Spain, which ultimately enhances the Atlanta Fed’s ability to
supervise the U.S. operations of FBOs doing business in the Sixth District.
Globally, the Atlanta Fed continued to support Federal Reserve System foreign technical assistance initiatives. Atlanta Fed supervision staff, representing diverse areas of expertise, served
as instructors at programs hosted by foreign regulatory agencies and multilateral organizations
in Mexico, Peru, the Cayman Islands, Portugal, India, and Korea. Staff also served as instructors
in Washington, D.C., Chicago, and San Francisco for examination personnel representing several
foreign regulatory agencies.
International Supervision continued to reach out to its FBO constituents in 2012 to exchange
ideas and to receive feedback on regulatory topics and evolving regulations. The group hosted
an International Bankers’ Outreach Luncheon at the Miami Branch, which was attended by international bank representatives, Atlanta Fed President Dennis Lockhart and First Vice President
Marie Gooding, and International Supervision officers and case managers.


Developing effective region-wide and global payment connections
The Atlanta Fed’s Retail Payments Office is continuing its leadership role in supporting the Western
Hemisphere Payments Initiative’s goal of establishing a regional payments hub. If implemented, the
hub would link many central banks’ payments systems in the Americas. The Center for Economic
and Monetary Studies in Latin America (CEMLA) is facilitating the discussions to determine feasibility of the connection between 13 central banks in the region and the Federal Reserve System.
The Atlanta Fed’s team also met with the Central Bank of Brazil to discuss this initiative when it
participated in the U.S. National ACH Association’s Global Payments Forum in Rio de Janeiro.
Community Indicators project
The Atlanta Fed’s community and economic development team conducted roundtables, interviews,
and polls for the Community Indicators initiative. The objective is to gather quantitative and qualitative
data about the needs of low- and moderate-income populations in southeastern communities. The
project focused on the labor force participation of low-wage job seekers, housing market trends and
recovery prospects in distressed neighborhoods, and access to consumer credit. Myriam QuispeAgnoli and Karen Leone de Nie wrote about the Community Indicators initiative in “Taking the Pulse of
Regional Low-Wage Workers,” which appeared in the Atlanta Fed’s July/August Partners Update.
Building a better understanding of the economies of the Americas
In November and December, the Americas Center hosted two workshops devoted to international economics. In the International Macro Workshop, which was cosponsored with New


Secured Transaction Reform
Across Latin America and the Caribbean, small
businesses do not have ready access to commercial credit. With a few exceptions, financial institutions will only accept real estate and vehicles as
collateral. In developing countries, banks do not
generally view movable assets—which include
capital stock, inventory, and receivables—as
adequate sources of collateral. Starved for operating capital, small businesses face impossible
choices: borrow from the informal credit networks,
or do without. Secured transaction reform (STR),
which would provide the legal and institutional
infrastructure through which movable assets can
be used for lending to small businesses, would
represent a major milestone.

Lockhart and former Panamanian President Nicolás Ardito-Barletta both spoke about the importance of STR. An EconSouth article on STR and
podcast discussions in both Spanish and English
with Ambassador Charles Shapiro of the Institute
of the Americas and Professor Boris Kozolchyk
of the National Law Center are available on the
Americas Center website.
Americas Center dissertation intern program
Each year, the Americas Center invites doctoral
candidates who are writing dissertations in the
field of economics on topics that have a direct link
to Latin America and the Caribbean to apply for a
summer dissertation internship. The economists
are expected to make significant progress on their
dissertation during their stay, and are asked to
make two presentations of their research and be
available for consultation with staff. In 2012, two
interns were selected. Carolina Cabrita Felix of
Emory University wrote her dissertation on “Decision Making in Individual Account Pension Systems.” Diego Vilan of the University of Southern
California is writing his dissertation on “Optimal
Monetary Policy under Stochastic Volatility in a
Small Open Economy.” ■

In July, representatives from 14 countries, USAID,
the World Bank, the U.S. Treasury and State
Departments, and several NGOs met in Atlanta
to discuss secured transaction reform in the
Americas. The Americas Center and the Institute
of the Americas in La Jolla, California, cohosted
the conference. The purpose was to bring together
countries working on secured transaction reform
with donors, commercial banks, and legal experts
to share experiences, coordinate efforts, and
share best practices. Atlanta Fed President Dennis

York University, economists presented leading-edge research on monetary policy, sovereign debt,
and firms in the open economy. Highlights included the paper “Financial Globalization, Inequality,
and the Rising of Public Debt,” by Marina Azzimonti, Eva de Francisco, and Vincenzo Quadrini, and
“Technology Capital Transfer,” by Thomas J. Holmes, Ellen R. McGrattan, and Edward C. Prescott.
Former Americas Center dissertation interns Andrea Raffo (now at the Fed Board of Governors) and
Javier Bianchi (of the University of Wisconsin and the National Bureau of Economic Research) also
presented papers. At the Southeastern International Development Economics workshop, which was
cosponsored with Georgia State University, economists from regional universities presented new
research on a range of topics related to economic development. The papers from both meetings are
available on the Americas Center website.


Throughout the year, Atlanta Fed economists developed new research on a range of topics
related to the Americas, including remittances, immigration, and pensions. Federico Mandelman
presented “Monetary and Exchange Rate Policy under Remittance Fluctuations” at the American
University of Sharjah in the United Arab Emirates. He also presented “Regular Variation and
the Identification of Generalized Accelerated Failure-time Models” at the International College
of Economics and Finance of the National Research University Higher School of Economics in
Moscow. He published “Immigration, Remittances, and Business Cycles” (with Andrei Zlate) in
the Journal of Monetary Economics and “Remittances, Exchange Rate Regimes, and the Dutch
Disease” (with Emmanuel K.K. Larty and Pablo A. Acosta) in Review of International Economics.
Myriam Quispe-Agnoli and Julie Hotchkiss’s article “Does Employing Undocumented Workers
Give Firms a Competitive Advantage?” (with J. David Brown) is forthcoming in the Journal of
Regional Science. Their article “The Expected Impact of State Immigration Legislation on Labor
Market Outcomes” is forthcoming in the Journal of Policy Analysis and Management. QuispeAgnoli’s article “¿Todos Vuelven? Políticas para el Retorno de Talentos en el Nuevo Milenio”
(“Everyone Returns? Policies for the Return of Skilled Workers in the New Millennium”), cowritten
with Fátima Ponce Regalado, was published in an edited volume, Empleo Y Protección Social.


Americas Center Annual Review


Americas Center Coordinator
Stephen J. Kay
Senior Economist
Research Department
Steering Committee
Michael J. Chriszt
Vice President
Public Affairs
Thomas J. Cunningham
Vice President and
Regional Executive
Todd Greene
Vice President
Community and
Economic Development
James M. McKee
Senior Vice President
Retail Payments Office
Juan Sanchez
Vice President
International Banking
Molly Willison
Assistant Vice President
Banking Supervision
Miami Branch

Ana Castilla
Regional Community
Development Director
Community Affairs
Miami Branch
Laurel Graefe
Economic Policy Analysis Specialist
Research Department
Paul Graham
Assistant Vice President
Miami Branch
George Holguin
Country Manager/Senior FBO Analyst
International Banking Supervision
Nancy Jaimes
Director, Country Risk and
FBO Analysis Unit
International Banking Supervision
Miami Branch
David Jimenez
FBO Analyst
International Banking Supervision
Miami Branch
Jorge Jimenez
RPO Product Development Director
FedGlobal ACH
Sandy Juárez
Director, Project Management
District Cash Function Office
Operations and Administrative Services
New Orleans Branch
Roxana Maneiro
Country Manager/Senior FBO Analyst
International Banking Supervision
Miami Branch


Some members of the Americas Center staff: (l-r) Juan Sanchez, George Holguin, Laurel Graefe, James McKee,
Stephen Kay, Paul Graham, Carolyn Healy, Myriam Quispe-Agnoli, Todd Greene