Challenges in the Mexican Financial Sector

The Mexican banking crisis of 1994/95 necessitated a major government rescue operation - estimated to have cost about 20 per cent of GDP. Since then, financial sector reforms have been implemented and the performance of the Mexican financial system has markedly improved, as shown by indicators of th...

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Bibliographic Details
Main Author: Bonturi, Marcos
Format: eBook
Language:English
Published: Paris OECD Publishing 2002
Series:OECD Economics Department Working Papers
Subjects:
Online Access:
Collection: OECD Books and Papers - Collection details see MPG.ReNa
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520 |a The Mexican banking crisis of 1994/95 necessitated a major government rescue operation - estimated to have cost about 20 per cent of GDP. Since then, financial sector reforms have been implemented and the performance of the Mexican financial system has markedly improved, as shown by indicators of the solidity and profitability of the banking sector. This has also been helped by a large infusion of foreign capital, as international banks entered the Mexican market through mergers and/or acquisitions. Nevertheless, several challenges remain. The banking sector is still relatively inefficient and the level of non-performing loans, though fully provisioned, remains quite high by international standards. The stateowned financial intermediaries, either in the form of development banks or trust funds, still play a large role, overlapping with commercial banks in some parts of the market. And the regulatory framework is often complex and characterised by a high cost of compliance. All ..