The Central Bank Report on the Financial System

On November, 12, the Central Bank of Mexico released its Report on the Financial System as of October 2014 (“the Report”), in which it highlights the rise in global financial vulnerabilities. Among those vulnerabilities are the flagging world economic activity, the increased leverage of non-financial sectors, and the burgeoning shadow banking sector. The foremost risk originating externally is that of a sudden reversal of capital flows associated with the normalisation of monetary policy in the advanced economies. Although Mexico has stood apart from other emerging economies in terms of its solid macroeconomic fundamentals, a well-capitalised financial system, and the prospect of medium and long term growth engineered by the structural reforms, it is vital to safeguard this macroeconomic robustness, to maintain an orderly macro-financial environment and to bullet-proof the financial system’s ability to withstand harmful shocks

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