Business is back in Argentina, and the banks are lending. Total private-sector loans, which include anything from business loans to credit cards, shot up last year as the economy picked up. Dollar-denominated loans jumped by 22% in 2004 to US$1.58 billion, while peso-denominated loans jumped up by just under a third to the equivalent of $12.23 billion.

That's music to the ears of Argentine negotiations as they face creditors over what to do with $100 billion in defaulted sovereign bonds. While that debate goes on, people are out spending again. "What is driving credit demand is consumer lending," says Jeanne Del Casino, vice president and senior credit officer at Moody's ratings agency in New York.

Corporate borrowing, however, has remained somewhat sluggish due to stalled talks between the government and its lenders. "My hope is that they get this swap going, that they achieve resolution so that other things can flow into place," says Del Casino.

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