Banking

Chastened by a credit boom and bust during the first half of the 1990s, the authorities have reformed, liberalised and privatised the banking sector while ensuring strong regulatory oversight and, in turn, relatively conservative lending practices. This explains, in part, the small size of the sector as well as the low levels of financial inclusion across the country. While the banking sector serves large corporations and the middle class relatively well, many smaller – and particularly informal – businesses struggle to access credit, and almost half of the 125.9m-strong population that lives in poverty have limited access to financial services. The authorities’ efforts to boost financial inclusion and improve financial literacy are beginning to bear fruit, however, with bank accounts becoming more ubiquitous and consumer credit levels picking up. This chapter contains an interview with Alejandro Díaz de León, Governor, Banco de México; and Carlos Serrano, Chief Economist, BBVA México.