The Mexican financial system has shown an orderly adjustment to a complicated environment

Summary

Through the “Financial Stability Report” (REF), Banco de México (Banxico) monitors the main risks and vulnerabilities that could affect the stability of the Mexican financial system.

Key points

• Key points:
• The stagnation of investment and the lower dynamism in consumption could be exacerbated by Pemex's financial challenges and the uncertainty associated with the potential effects of the new government's public policies
• The deterioration of the country's sovereign risk could affect the confidence of investors and access to financing of national economic agents, negatively impacting the growth outlook of the economy and the risk indicators of the financial system
• The financial system has shown an orderly adjustment to the environment of uncertainty, low growth and increase in national risk premiums, maintaining adequate levels of capitalization and liquidity. Potential vulnerabilities remain limited and stress tests suggest that the Mexican banking system has sufficient strength to face adverse events given its current level of capitalization
• Consumer financing continues to slowdown while housing credit slightly increased its dynamism. Although the delinquency of both portfolios maintained a stable behavior, shocks in employment or income could increase the risk of these portfolios in the future
• Financing for non-financial private companies also showed a slowdown, which could be reflecting a lower demand for credit due to the postponement of their investment plans

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