Mexican Financial System

Definition
According to Banco de Mxico
A system which seeks the efficient allocation of
resources among savers and borrowers.
It requires, among other things, efficient and solvent
financial intermediaries, efficient markets, and a legal
framework that defines clearly the rights and
obligations of all agents involved.
Banco de Mxico permanently monitors the
institutions that comprise this system, proposes
reforms to the legislation in force, and issues
regulations in the areas under its authority

Financial intermediaries
Are all those firms that accept deposits from
households and businesses; provide loans to
other economic agents.
Functions:
1. Create liquidity (how quickly it can turn into
money)
2. Minimize borrowing costs
3. Provide legal and accounting experience
4. Diversify risk (reduce the possibility of losing
money on transactions)

 Mexico has one of Latin America's most

developed banking systems, consisting of:
A central bank (Banco de Mxico) and,
Six types of banking institutions:

1. Public development banks (Nafinsa agriculture &

industrialization),
2. Public credit institutions (Banco Nacional de Obras
y Servicios Pblicos),
3. Private commercial banks (BBVA Bancomer,
Santander, etc.)
4. Private investment banks,
5. Savings and loan associations (Grupo Financiero
Inbursa), and
6. Mortgage banks.

Central Bank Banco de Mxico

(Banxico)
Is the bank of banks (not a
bank for citizens and
Businesses) that regulates
financial institutions and
markets of a country.
Its main objective is to
provide the economy with
domestic currency (coins &
bills)
And to procure the stability of
the currency's purchasing
power,
As well as to to keep inflation
low and controlled.

Avenida 5 de Mayo 2, Colonia Centro,

Delegacin Cuauhtmoc,
www.banxico.org.mx

About autonomy
April, 1994
This means: No authority can
demand credit from it, hence
guaranteeing its uninterrupted
control over the amount of
money (banknotes and coins)
in circulation.
The purpose of autonomy is
that CBs operation be
conducive to preserving the
local currencys purchasing
power; that is, to keeping
prices stable over the long term
Source: Banxico

Secretara de Hacienda y Crdito

Pblico
Control of the Federal
Governments economic
policies on:
Finances, taxes, budget,
income, public debt,
statistics,
in order to
Consolidate a
sustainable economic
growth.