## IMF Survey: Mexico Banks Resilient, But Global Risks Need Care

_IMF News, March 30, 2012_

## Source details

**Canonical URL:** [IMF Survey: Mexico Banks Resilient, But Global Risks Need Care](https://www.imf.org/en/news/articles/2015/09/28/04/53/socar033012a)

## Other formats

- [Markdown version](/en/news/articles/2015/09/28/04/53/socar033012a/index.md)
- [Structured JSON version](/en/news/articles/2015/09/28/04/53/socar033012a/index.json)
- [Bundle manifest](/en/news/articles/2015/09/28/04/53/socar033012a/bundle-manifest.json)

## Bibliographic details
- Published: March 30, 2012

---

### Overview and IMF assessment
- Mexico's banking system is "resilient and well capitalized," and stress tests indicate it "would be capable of sustaining significant shocks."
- The IMF assessment was published on March 30, 2012.
- Fernando Montes-Negret, senior financial expert in the IMF’s Monetary and Capital Markets Department and head of the assessment team, said: “Our assessment of Mexico’s financial system is very positive.”
- Mexico is one of the major 25 financial sectors required to undergo in-depth reviews of their financial health by the IMF every five years under the Financial Sector Assessment Program.

### Cross-border linkages and vigilance
- The IMF highlighted Mexico’s "significant linkages to the global economy and to Spanish banks" and urged authorities to "monitor closely and respond quickly to emerging risks."
- The IMF noted episodes of distress in recent years and that in the wake of the global economic crisis it has strengthened surveillance of countries’ financial systems.

### Key reforms recommended (high priority within next three years)
- A fixed term for the President of the Banking and Securities Commission, and a rebalancing of its Board.
- Broaden regulatory and supervisory powers to financial and mixed-activity groups.
- Fully implement new international banking regulation known as Basel III to improve supervisory processes, including criteria to require capital buffers above regulatory minimums.
- Tighten concentration limits in the banking system and introduce capital charge for concentration risk under Basel III regulations.
- Change pension fund investment guidelines and regulatory tools to encourage focus on long term returns, including using long-term benchmarks.
- Improve the legal framework for derivatives.

### Main risks identified
- Concentration risk: the seven largest financial groups hold or manage about three-quarters of the banking system’s total assets worth $600 billion at the end of June 2011.
- A U.S. economic slowdown that would impact Mexico’s exports, GDP growth, and remittances, potentially causing a "major increase in nonperforming loans and capital impairment." The IMF noted Mexican banks experienced deterioration of personal and consumer loan portfolios following the 2007–2009 crisis.
- Distress in foreign parent banks of the largest Mexican bank subsidiaries: ongoing financial pressures in Europe could affect Mexican subsidiaries via higher funding costs and liquidity pressures through deposit losses and loss of parent banks’ and other credit lines.
- Solvency problems in a number of smaller banks affecting confidence in the banking system.

### Institutional and supervisory enhancements urged
- Strengthen the institutional framework for financial supervision by:
  - Establishing a fixed term for the President of the Banking Commission.
  - Rebalancing the Banking Commission’s Board.
  - Promoting stronger legal safeguards for supervisory personnel.

*Source: IMF Survey: Mexico Banks Resilient, But Global Risks Need Care (IMF Survey online, March 30, 2012).*

---


## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [IMF Country Focus](https://www.imf.org/en/news/country-focus)
- [Policy](https://www.imf.org/en/news/search)
- [Read the press release](http://www.imf.org/external/np/sec/pr/2012/pr12111.htm)
- [Report in full](https://www.imf.org/external/pubs/cat/longres.aspx?sk=25810.0)
- [Top 25 financial sectors](https://www.imf.org/external/pubs/ft/survey/so/2010/NEW092710A.htm)
- [Sectors under review](https://www.imf.org/external/pubs/ft/survey/so/2012/POL011312A.htm)
- [Factsheet: FSAPs](https://www.imf.org/external/np/exr/facts/fsap.htm)
- [Brazil’s FSAP](https://www.imf.org/external/np/sec/pr/2012/pr1297.htm)
- [surveillance](https://www.imf.org/external/np/exr/facts/surv.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar033012a_