LIMA Fallout from debt woes in Europe will pale in comparison to the meltdown of Lehman Brothers in 2008 and intense market volatility could force policymakers to agree on fixes faster, Peru's central banker said on Thursday.
Strong and liquid Latin American banks have opportunistically responded to the turmoil by buying loan portfolios from their European peers at deep discounts, like in a "Persian bazaar," Central Bank President Julio Velarde told the Reuters Latin America Investment Summit.
"I'm relatively optimistic about the future. I think we are passing through some weeks of sharp turbulence. It could be a blessing in disguise so that decisions (in Europe) are made faster and with more force. "Otherwise, if actions aren't taken, perceived risks will increase."
He said he thought European institutions would eventually hammer out a solution to the region's financial problems and find necessary funding to calm investors.
"This isn't Lehman," he said in reference to the global investment bank that melted down in 2008, causing widespread economic havoc.
Though Chinese exports to Europe have slowed, raising concerns the Asian giant's economy could moderate and hurt prices for commodities Latin America exports, Velarde said: "China still has the fiscal and monetary capacity to respond ... I suppose China will keep on growing."
He said worries about a real estate bubble for middle- and upper middle-class housing in China ignore the fact that demand for working class housing is still strong and that all types of housing need copper that Peru exports.
(Reporting by Teresa Cespedes and Terry Wade)