Hsbc In Argentina

278 Words2 Pages
III. Options A. Stay in Argentina during the Peso crisis 1. HSBC had entered into Argentina in 1998 a. Had invested a lot into creating a very diversified portfolio in Argentina and did not want to forgo everything it had gained. 2. As one of the world’s top banks in terms of foreign exchange banks, and total assets leaving would hurt Argentina as well. 3. Believe in Argentina’s historical economic climate and continue to invest in the hopes of the economy and Peso during around. B. Pull out of Argentina 2. The questionable sustainability of the Argentinean government has led to a freeze in the cash flow of foreign investors in the country a. HSBC was one of the main investors b. Central Bank of Argentina tightened the requirements for foreign investment banks to operate in the country c. Was the political and economic instability of the country worth the risk of continued operations IV. Company decision A. HSBC remained in Argentina during the Peso crisis B. They had faith that the Argentinean economy would rebound and that they could be profitable again C. I do think it was the best choice 1. They were able to pay on all of their external obligations and continue to capitalize its Argentina subsidiary. 2. Refused to infuse new capital in Argentina until the crisis had stabilized D. The second choice would have been to cut all ties and leave Argentina • HSBC lost $977 million in 2001 in Latin America, compared to a profit of $324 million in 2000 • Despite early losses after the initial economic collapse, HSBC has remained in Argentina throughout its financial crisis and tumultuous
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