Despite initial concerns that Asia's financial downturn could spill over into other emerging markets, the crisis has had no impact on the creditworthiness of Latin America, according to rating agencies.

"If anything, sovereign ratings in Latin America have continued to improve, at least in some countries like Argentina and Mexico, while Chile has remained consistently strong," said Manuel Lasaga, president of Strategic Information Analysis Inc., a Miami consulting firm that compiles sovereign ratings for banks.

Gabriel Torres, director for sovereign ratings and structured finance at Fitch IBCA Inc., said, "Asia has had an only negligible impact on Latin America."

Most of the Asian impact on Latin American markets has been felt indirectly, mainly as slackened demand for metals and oil. But analysts also said they were keeping close tabs on changes in capital flows to Latin America.

"Many of these countries have sizable short-term borrowing programs," noted Lacey Gallagher, director of Latin American sovereign ratings at Standard & Poor's Corp.

She added that, so far, countries subject to fluctuations in oil and commodity prices, like Chile, Venezuela, and Mexico, as well as countries subject to capital markets shocks, like Brazil, have taken measures to protect themselves against any spillover from Asia.

Sovereign ratings have become increasingly important as U.S. banks have stepped up trade finance.

However, short- and long-term ratings compiled by the three major rating agencies-Standard & Poor's, Fitch IBCA, and Moody's Investors Service-are mainly geared to institutional investors in foreign capital markets.

By contrast, Strategic Information Analysis, or Stratinfo, targets banks and compiles three categories of ratings-for trade finance of less than one year, for cross-border loans of up to two years, and for lengthier cross- border credits.

Mr. Lasaga said the decision to establish three categories reflected the evolution of views both by banks and regulators to see the difference between trade finance and other types of loans.

"One of the lessons we've learned from debt crises was that trade finance of less than one year is the least vulnerable to payment interruptions," he said. "Over one year, it starts to enter a gray area."

Among Latin American countries, Chile has the strongest rating; Nicaragua, the weakest.

Mr. Lasaga conceded that rating agencies had come under strong criticism since the Asian crisis broke last summer for failing to warn that a downturn was likely soon. But he also emphasized that though most U.S. banks closely monitor the creditworthiness of foreign countries the rapid growth of business with Asia had blinded some U.S. banks to the dangers they were facing.

"Part of the reason for the debt crisis was a lack of adequate policies and procedures at banks for controlling risk, even though some (Asian) debtor countries had expressed concerns about the extent of lending by commercial banks to their countries," Mr. Lasaga said.

If banks failed to control the risks they were running in Asia, he added, they must blame themselves, at least partly.

"Banking is always vulnerable to the cyclical effects of overexpansion through excessive risk taking and then contraction," the consultant said.

"Bankers' bonuses are a function of how many loans they can book. They are not rewarded for saying 'no.' " u

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