Mexico in Crisis, the U.S. To the Rescue : The Financial Assistance Packages of 1982 and 1995

In January 1995, as in August 1982, Mexico was on the verge of defaulting on its foreign obligations. On both occasions the U.S. government contributed, and helped align the contribution of others, to a financial rescue package to avoid default. However, the characteristics of the 1995 financial assistance package and the support provided by the United States administration were quite different. This paper examines and compares these two rescue packages. It concludes that the relative speed with which Mexico regained access to capital markets and avoided the risk of a systemic crisis in 1995 must be attributed to a large extent precisely to the differences between these packages