The resilience of the Mexican banking system: the macroeconomic perspective. An emerging country case study

Details

Supervisors

Defraigne, Jean-Christophe

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion

Abstract

The periphery, i.e. emerging economies under which Mexico, experienced recent developments in their banking system as they were used to have a highly protected banking industry in the past. This typical ‘emerging-economy’ banking transformation process, driven by overlapping factors such as deregulation, changes in corporate behavior, international pressures, technical innovation and responses to banking crises, made room for more banking consolidation- and competition streaks. Mexico therefore, as other emerging markets, is currently undergoing such a banking development process. The country’s financial services- and banking industry, yet relatively underdeveloped compared to its OECD peers, is subject to certain major domestic and global interdependency forces able to jeopardize the domestic banking system as a whole, and whose repercussions might fall back on other interrelated sectors. These critical risk factors are grouped among three domains: macro-economic, socio-institutional and financially/bankable. The macro-economic risk factors consist in foreign investments, U.S. relations, contagion and domestic macro-economic imbalances. The socio-institutional risk factors handle the political aspect, the oligarchic presence, social inequalities and human security. The bankable-related risk factors process the banking system structure as a whole, its stake in shadow banking and the consolidated risk management at global level.