Mexico | The banking system shows strong fundamentals

Summary

The impairment of the employment and income indicators stemming from the COVID pandemic has brought questions about the health of banks. Despite the complexity of the current situation, it should be noted that the fundamentals of the banking system as a whole show strength to face the economic consequences of the pandemic.

Key points

• Key points:
• As of the 1Q20 the levels of capital, liquidity and non-performing loans show a banking system in good shape
• Although there is a group of vulnerable institutions in the banking system, this group does not represent a high share of total assets and therefore do not risk the well functioning of the system as a whole
• Financial authorities have the regulatory tools to liquidate an institution in a way that does not affect the rest of the system

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