Continental European banking and finance provide important references for Latin America. This chapter focuses on relations between banking and political development in the traditional sense of democratization; the inclusion of social classes in political institutions. Unfortunately, there are few precedents for this type of analysis. Since US Treasury Secretary Douglas's testimony to Congress in 1941, or Gabriel Ardant's overview of finance in Western European states published in 1975, we were unable to find a compelling discussion of finance, banking and political development. Moreover, Ardant's synthesis of theory and European history concludes by warning scholars and policymakers in developing countries that experiences from Europe do not apply because ‘numerous bottlenecks intervene between demand and any response of agriculture or industry’ and, therefore, ‘solutions must be sought in different forms’. This chapter begs to differ, somewhat, by reviewing several ‘different forms’ for reassessment of policies in Brazil and Latin America, specifically, development banks, savings banks and policies from coordinated market economies.

This effort is part of a broader re-evaluation of market-centred paradigms in developing countries. Long before the current financial crisis, Pinheiro argued that crises in emerging markets encouraged economists and policymakers to search for alternative ‘post-liberal’ policies. Bresser-Pereira argues for a new developmentalism to replace policies of privatization and liberalization in Brazil that have slowed growth. Cornia and contributors argue that financial liberalization tends to worsen domestic income distribution in developing and emerging economies. Amsden broadens debates by arguing that classic themes about production and government policies in late development remain timely. Evans and Chang remind us that most states embed and underpin economic policies and development, and that the market-centrism of recent social science lost this fundamental insight. Finally, Stallings & Studart bring our object of inquiry into focus by reviewing finance policies for sustainable development in Latin America and other developing regions. This chapter briefly examines banking and finance policies in Europe in an effort to identify institutions and policies able to deepen credit and finance, accelerate economic growth, improve income distribution and promote social inclusion and citizenship in Brazil and Latin America.