Mexico | Monthly Report on Banking and the Financial System. April 2020

The Financial System addresses a number of challenges in the face of the Covid-19 pandemic: to keep an adequate financing flow, preserve appropriate liquidity and a correct operation of exchange rate and debt markets as well as to help intermediaries to cope with the management of market and credit risk.

Key points

• Key points:
• The expected decline in economic activity arising from the COVID-19 pandemic means that the scenario for the performance of banking loans is far from encouraging.
• Weakness in bank deposits place them in a vulnerable position when faced with the adverse effects that the COVID-19 pandemic will have on the economy and the financial markets.
• Domestic asset prices show a negative differentiation in an environment characterized by a clear contrast between the significant recovery of equity markets and the economic fundamentals.
• Flows of mortgage financing drop by 1.9% in the first two months of 2020.
• Regulatory response in face of the Covid-19 pandemic.

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