Financial Services

The period of easily raising funds from abroad seems to be coming to an end for emerging markets around the world. In the new environment of higher interest rates in the US and increased competition for capital flows, portfolio managers are becoming more selective with where they place their money.

Since the last major financial crisis in 1994-95, Mexico has seen the emergence of a banking sector characterised by robust regulation, with high levels of capitalisation and profitability. While economic growth has slowed over the past half-decade and monetary policy has tightened in more recent years (see Economy chapter), credit growth remains robust, leading to an improved...

Mexico is very much a multi-risk insurance market. In addition to natural disasters such as earthquakes, active volcanoes, hurricanes and tsunamis, high levels of organised crime in certain parts of the country pose a constant risk to individuals and property. Despite this high potential for growth, the sector’s development has been held back by disappointing economic growth...

Despite occurring a quarter of a century ago, Mexico’s financial crisis of 1994-95 continues to cast a long shadow over the sector. As consumer and business confidence collapsed, so did bank credit as a share of GDP. Bankers and their regulators adopted and promoted much more conservative lending practices, resulting in many consumers and smaller businesses being locked out of...

The three decades before the 2007-08 global financial crisis were marked by the world’s financial networks becoming increasingly interconnected. Financial system regulatory convergence, the growing penetration of World Trade Organisation rules and the creation of currency unions, such as the euro, resulted in a surge in cross-border capital flows. Global banks began to see the...