The long-run economic performance of Argentina since World War One has been relatively disappointing until recently. Yet, in the interwar period, signs of future retardation and recurring crises were not so obvious. It is often claimed that an unmitigated success was the remarkably rapid growth of domestic financial markets. In conventional models, such "financial deepening" would help accelerate development, especially in an industrializing economy such as Argentina's. Yet the promise of this trend was unfulfilled: first the outbreak of World War One and then the Great Depression proved a setback for the fledgling financial system, and a long-run deterioration set in after 1940. In this paper we trace the course of financial development using historical and international comparisons and we analyze both macro- and microeconomic aspects of financial intermediation.