Trends in Mexican Financial System Development against the Backdrop of the Global Financial Crisis

Event Type
Workshop

Location / Date
Mexico, 03.12.2009 until 04.12.2009

Deutsches Institut für Entwicklungspolitik (DIE), Internationale Weiterbildung und Entwicklung gGmbH (InWEnt)

Due to its far-reaching effects, the global crisis has clearly shown that the stability of national and international financial markets has to be considered an important public good. Against this backdrop it is therefore of utmost significance to identify steering and control deficits in international financial markets, develop solutions of financial governance and come to at least a minimal international consensus on this matter. For that reason it is interesting to find out how this global crisis affects the large emerging countries that are members of G5 and G20, and how these countries approach possible solutions.

As one of the most important emerging countries of the American continent, Mexico is in the focus of this conference. What effects does the crisis have on this country and how does Mexico react to the financial and economic crisis? How does the crisis affect the country’s real economy and the financial sector? What kind of measures are taken or discussed to limit the effects and keep the financial sector functioning and stable even in the future? To which extent do the current international debates on the future financial architecture, for example within the scope of G20, influence the discussions in Mexico and in how far does Mexico contribute to the international debates. What kind of measures and strategies does Mexico apply to advance the financial inclusion of its population, which is still below the level of other comparable emerging countries, despite the current financial sector crisis?

InWEnt and the Mexican Ministry of Finance organised a conference on “Trends in Mexican Financial System Development against the Backdrop of the Global Financial Crisis” (Enfrentando la Crisis Financiera y Económica: Temas y Tendencias de Desarrollo y Estabilidad del Sector Financiero Mexicano) in Mexico-City on December 3 and 4, 2009. Participants of this conference were national and international experts from the financial sector, development banks, supervisory authorities, ministries, central banks as well as from universities, and renowned research centres. This conference in Mexico was the fifth dialogue in 2009, after conferences in India (March), China (May), South Africa (May) and Berlin (September). 

The workshop served an in-depth analysis and discussion of specific effects of financial crisis in Mexico and the measures taken and planned to limit these effects against the backdrop of the global financial crisis. 

Stronger control mechanisms of the Mexican banking sector which have been reinforced since 1995 have proved to be of advantage in this crisis. Nevertheless, the damaged trust in banks worldwide and the drop in international trade also curb Mexico’s economic growth. For 2009 a decrease in GDP of 7 % has been forecasted. From mid 2008 to mid 2009 the number of officially unemployed has increased from 3.5 % to 5.2 %. This trend is accompanied by a significant growth in informal sector employment. At the same time, the number of people living on less than 4 USD per day rose by 10 million to almost 55 million from 2006 to 2009 according to World Bank statistics; 18 million of these people must be regarded as extremely poor. 

Against this backdrop, the Dialogue Forum on the one hand discussed the domestic effects on real economy – losses in the export sector, drop in foreign investments and in transfers of remittances – with a view to the consequences for poor segments of the population. On the other hand, Mexico’s potential as a ‘bridging country’ to Europe and as integral part of the partially restructuring of international financial architecture and as contributing factor to strengthening and supervising the regulation of financial governance as well as the reform of financial institutions is to be discussed. Eventually, the conference focused on how Mexico – particularly in view of the effects and symptoms of the crisis – will enhance the urgently needed financial inclusion of the population and the access to financial services of hitherto unbanked segments of the population.

These questions were addressed in four modules within the scope of the conference. National and international experts presented core figures and facts and discussed them later on intensively with the conference participants.

Hinweis

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