This paper presents a detailed assessment of the observance of Mexico’s compliance with the Basel Core Principles. The Comision Nacional Bancaria y de Valores (CNBV) has achieved a fundamental step forward in implementing a complete Pillar I capital adequacy regime that is consistent with the...

A detailed assessment on the observance of Mexico’s compliance with International Organization of Securities Commissions objectives and principles of securities regulation is presented. The regimes governing the regulation of issuers, collective investment schemes, and secondary markets, and...

This paper presents detailed assessment on the observance of Mexico’s compliance with the International Association of Insurance Supervisor's Insurance core principles. A new insurance law is expected to be submitted to congress in September 2011, precisely at the time of the mission. The long...

This paper discusses the Financial System Stability Assessment of Mexico. The Mexican banking system is profitable, liquid, well capitalized, and stress tests suggest that it is able to withstand severe shocks. The strength of capital buffers has persuaded the authorities to introduce Basel III...

We build a small open economy, real business cycle model with labor market frictions to evaluate the role of employment protection in shaping business cycles in emerging economies. The model features matching frictions and an endogenous selection effect by which inefficient jobs are destroyed in...

Mexico’s policy stance has focused on balancing domestic and external conditions, supporting the recovery while rebuilding policy buffers through fiscal consolidation and reserve buildup. Growth has remained resilient during the first half of 2011 and is expected to continue into 2012, albeit...

This paper reviews developments in private capital flows to developing countries since the Mexican financial crisis in December 1994. The paper points out that a strong recovery in these flows masks some significant changes in their characteristics, particularly in the type of borrowers back...

This paper presents Mexico’s detailed assessment report on antimoney laundering and combating the financing of terrorism. Powerful drug cartels, resorting to extreme violence, have extended their activities across various parts of the country, and these activities pose significant challenges...

This study shows that in Mexico there is a long-run relationship between the real exchange rate and capital inflows, the external terms of trade, and productivity in the manufacturing sector. A once-and-for-all unit increase in the ratio of quarterly capital inflow to quarterly (annualized) GDP...

The report discusses the important role of the Flexible Credit Line (FCL) in helping Mexico to survive in the fragile global economic environment. The FCL’s contribution in maintaining an orderly financial market in Mexico is noteworthy. IMF staff reaffirms their commitment toward Mexico in...