Mexico is one of many countries beefing up financial
regulation after ineffective rules and implosions on Wall Street helped trigger
the worst financial crisis in decades.
Mexico's Financial Stability Board will coordinate the
response of government agencies to systemic dangers to the financial system,
President Felipe Calderon and Finance Minister Ernesto Cordero told a news
conference.
"This board will have the authority to supervise
institutions in an integrated way and consider the viability of individual
financial entities and the system as a whole," Calderon told reporters and
banking executives.
Creation of the new board may be unwelcome news for some
Mexican bankers, who already worry that relatively strict rules in Latin
America's No. 2 economy could become too tough.
Mexico's banking sector is dominated by international
giants including Citigroup, Spain's BBVA and Santander, HSBC and Canada's
Scotiabank.
Banks in Mexico and other emerging market powerhouses
like Brazil weathered the financial crisis fairly well because they had no
exposure to subprime housing loans, but their credit card businesses and
consumer loan portfolios were pinched by defaults as unemployment jumped.
The board "will allow for the early identification
of situations that could endanger the stability and solvency of the Mexican
financial system," Cordero said.
Mexico, Brazil and other emerging market countries
suffered home-grown financial crises in the 1990s that taught regulators and
bankers lessons that helped them ride the 2008 meltdown that began in the
United States.
As the European Union struggles to keep Greece's
financial crisis from contaminating other economies, regulators in Mexico
already hold banks to strict standards compared to many developed countries.
The Group of 20 wants a wide package of financial reforms,
known as Basel III, introduced at the end of 2012. The new rules would toughen
up capital requirements and introduce new minimum global liquidity standards
for the first time.
Guillermo Babatz, head of Mexico's National Bank and
Securities Commission, told Reuters in May that tighter global capital
requirements will have little effect on Mexico's banks, which already adhere to
strict rules.
He said the more pressing challenge for Mexico is the
creation of better rules to ensure bank liquidity.
The Financial Stability Board's members will include
officials from the central bank, the finance ministry, the IPAB deposit
insurance agency and the National Banking and Securities Commission.
Cordero also highlighted rules enacted last year to
increase banks' reserves against losses in their credit card portfolios. In
2011, similar rules will be applied to increase reserves against consumer
credit and mortgages.
Mexico will also unveil regulations reducing the amount
of money banks can lend to their controlling shareholders, Cordero said.
