Apr 7, 2011, 12:15 PM
Post #19 of 59
It hardly makes me an expert on Mexican banking, but I had an job teaching English and helping with some translations in the legal department at what was then Banco Bital when it was being sold to HSBC . At least according to the banking lawyers, one of the ironies of Mexico is that the meltdown and revaluation of the peso led to regulations that make Mexican banks basically failure-proof. They have very high capital reserve requirements (one reason loans are so difficult to get in Mexico) and — should the bank have problems, it is forceably sold.
It was ironic that during the U.S. banking meltdown, Mexican banks remained stable... the rarity of mortgages had a lot to do with it, but there was something odd in a situation where the huge U.S. banking corporation, Citibank, was dependent on its Mexican operation, Banamex, to stay afloat. There was a very real possibility that the Mexican government would force Citibank to sell Banamex — both because there are regulations designed to prevent foreign governments from holding shares of Mexican banks (and the U.S. government bought Citibank shares) AND because the Mexican regulators didn't want a Mexican bank connected to such a shaky enterprise.
Of course, a radical change in the value of the peso is always a possibility, but then, the U.S. dollar has started fluctuating lately too. I suppose we could all start carrying our savings in gold chains.