Mexico: Financial Sector Assessment Program-Financial System Stability Assessment
IMF Staff Country Reports, November 4, 2022
Source details
- Canonical URL
- Mexico: Financial Sector Assessment Program-Financial System Stability Assessment
Other formats
Bibliographic details
- Published: November 4, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400223686.002
Executive findings
- Mexico has had a robust financial system for many years.
- Banks have maintained high capital and liquidity buffers.
- The system provides less finance to the real economy than in peers.
- Mexico has experienced significant real GDP fluctuations since the Peso crisis but no major credit boom-bust cycles, given strong policy frameworks that have been further enhanced since the 2016 FSAP.
- The economy has strong external trade and financial linkages; these have been an important channel for transmitting global shocks.
- The financial system has been resilient to the COVID-19 pandemic, reflecting a mix of resumption in mobility and support from domestic and global policies.
- Buffers in the financial system have increased further during the pandemic.
- The key risk confronting Mexico is the first sustained and ongoing tightening of global liquidity conditions since the Global Financial Crisis.
Systemic vulnerabilities and transmission channels
- External trade and financial linkages act as major channels for transmitting global shocks to Mexico.
- Tightening global liquidity conditions represent the principal systemic risk.
Policy context and institutional strengths
- Strong policy frameworks have helped avoid major credit boom-bust cycles.
- Policy frameworks were further enhanced since the 2016 FSAP.
Pandemic response and resilience
- Resumption in mobility and support from domestic and global policies supported financial system resilience during COVID-19.
- Financial system buffers increased during the pandemic.
Subject areas and keywords included in the assessment
- Subjects: Asset and liability management, Commercial banks, Financial institutions, Financial regulation and supervision, Financial Sector Assessment Program, Financial sector policy and analysis, Financial sector stability, International organization, Liquidity, Monetary policy
- Keywords: Banco de México, bank cash flow analysis result, bank solvency stress test result, banking liquidity regulation committee, bridge bank tool, climate finance strategy, Commercial banks, Development bank, Financial Sector Assessment Program, Financial sector stability, Global, Liquidity, liquidity stress test framework
Content in this bundle
- 1mexea2022002