Mexico: Financial Sector Assessment Program-Technical Note on Selected Issues in Financial Safety Net Arrangements and Financial Crisis Preparedness
IMF Staff Country Reports, November 10, 2022
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Bibliographic details
- Published: November 10, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400224676.002
Overall assessment
- The Mexican financial authorities strengthened the financial safety net since the last FSAP but need to continue and accelerate enhancements.
- Recovery and resolution plans are in place for all commercial banks.
- Systemic banks are required to increase their loss absorbency, complementing the critical Basel III reforms that the authorities have advanced.
- Authorities progressed preparations for using the bridge bank tool and signed cooperation agreements with all major home jurisdictions of the Mexican systemic banks.
- Authorities clarified the emergency lending facilities including to banks in resolution, and improved the depositor payout process.
Key findings and unresolved weaknesses
- Credibility and feasibility of banks’ financial contingency arrangements need further improvement.
- There remain impediments to banks’ resolvability and to the use of:
- the bridge bank tool, and
- purchase and assumption transaction resolution tools.
- The resolution regime’s remit does not fully cover financial holding companies and needs expansion.
- The resolution and deposit insurance agency requires reinforcement in:
- governance,
- autonomy, and
- resources.
Policy recommendations and priorities
- Continue and accelerate enhancements to the financial safety net.
- Further improve the credibility and feasibility of banks’ financial contingency arrangements.
- Remove impediments to banks’ resolvability and to the operational use of the bridge bank and purchase and assumption transaction resolution tools.
- Expand the resolution regime’s remit to include financial holding companies.
- Reinforce the resolution and deposit insurance agency’s governance, autonomy, and resources.
Document snapshot
- Publication date: November 10, 2022
- Pages: 32
- Series: IMF Staff Country Reports (Country Report No. 2022/339)
International Monetary Fund: Mexico: Financial Sector Assessment Program-Technical Note on Selected Issues in Financial Safety Net Arrangements and Financial Crisis Preparedness
Content in this bundle
- Executive Summary