What does foreign capital and ownership mean for the future of Mexicos banking sector?
Mexico’s banking sector has come a long way from the dark days of the mid1990s economic crisis. In just six short years, the nation’s banks have gone from zero solvency and negative capital to become the object of international investor desire. By nearly all analyst accounts, Mexico’s banks are well on the road to solvency, infused with capital from Spanish and U.S. financial institutions, among others. It hasn’t been easy–the tiny assortment of banks that survived the 1994/1995 peso crash was left with the gargantuan task of rebuilding from scratch. Although in subsequent years the economy recovered slowly and steadily under the austere fiscal policies of former President Ernesto Zedillo’s administration, and despite the banking sector’s multi billion-dollar…