Mexico: Financial Sector Assessment Program-Financial System Stability Assessment

International Monetary Fund

No 2022/335, IMF Staff Country Reports from International Monetary Fund

Abstract: Mexico has had a robust financial system for many years. Banks have maintained high capital and liquidity buffers. However, 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.

Keywords: bridge bank tool; Development bank; banking liquidity regulation committee; bank cash flow analysis result; liquidity stress test framework; climate finance strategy; Banco de México; bank solvency stress test result; Financial Sector Assessment Program; Commercial banks; Liquidity; Financial sector stability; Global (search for similar items in EconPapers)
Pages: 64
Date: 2022-11-04
New Economics Papers: this item is included in nep-fdg
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