5 risks facing the financial system in Mexico

“The Mexican financial system continues to show resilience and, in general, a solid position, to a large extent propped up by a commercial bank that has levels of capital and liquidity that easily exceed the regulatory minimums,” said the organization made up of officials from the Ministry of Finance and the Bank of Mexico (Banxico), among others.

In an update of its balance of risks, the Board noted that the financial system continues to show resilience, but some non-bank financial intermediaries have faced difficulties associated with rising prices and less availability of new sources of financing.

The main external and internal risks facing the country for the following months are:

1. Possibility of inflationary pressures spreading.

2. Aggravation of geopolitical tensions.

3. Unfavorable financial conditions due to interest rates.

4. Systemic events in the global market.

5. Weakening of both external and internal economic activity.

“The results suggest that the external risk most mentioned by financial intermediaries is the deterioration in the growth prospects of the global economy, while the internal risk most mentioned was higher than expected inflation,” the statement said.

The Financial System Stability Council is made up of the Secretary of Finance and Public Credit, Rogelio Ramírez de la O, who chairs it; the Governor of Banxico, Victoria Rodríguez; the Undersecretary of Finance and Public Credit, Gabriel Yorio; two deputy governors of Banxico; the president of the National Banking and Securities Commission, Jesús de la Fuente; the President of the National Insurance and Bonds Commission, Ricardo Ochoa Rodríguez; the President of the National Commission of the Retirement Savings System, Julio César Cervantes; and the Executive Secretary of the Institute for the Protection of Bank Savings, Gabriel Ángel Limón.