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Following the crisis, the financial system was extensively reformed to strengthen microprudential regulation, focused on individual entities, and macroprudential regulation, to prevent the accumulation of imbalances in the whole system that may affect the real economy.
The paper presents a quasi-historiographical or “narrative” analysis of the most critical developments occurring prior to and through the last nine recessions in light of Minsky’s theory of financial instability.
In the first nine months of 2019 the main source of bank credit growth granted to the private sector was that granted to companies. Commercial banks deposits loses dynamism. Weakness of external financing sources influenced by concerns about the global cycle and internal uncertainty.
In the first six months of 2019 the net profit for the Spanish banking system has been EUR 5,326 M , 20% less than in the one obtained in the first semester of 2018, due to a weak second quarter. The key factors were weak revenues, cost control, and provisions which remain at minimum levels.
December 5, 2019
Mexico | Financial system risks stemming from excessive credit growth remain subdued
The Financial Stability Report highlights that the pace of private financing to households and firms has diminished. There are upward risks for households and firm’s non-performing loans as the economy and employment have impaired recently.
The International Monetary Fund (IMF) has reported on the results of the annual assessment of the Mexican economy for 2019. The IMF approves a new flexible credit line for Mexico. Commercial banking contributed to growth in 1H19. Adjustments for securities operations. Amendments for bank correspondents.
Bank assets growth picked up to 7.7% in Q3 2019 supported by a higher loan growth rate. Assets quality worsened and diverged among big and smaller banks. Capital adequacy ratio dropped on faster growth in risk-weighted assets, small banks are facing deteriorating conditions in funding through NCDs and bond market.
During September 2019, bank deposits seems to have been more influenced by the prolonged weakness of economic activity in Mexico than by the environment of lower interest rates. This was reflected in a slower pace of joint growth of demand and term deposits, a fact that has not been observed since December 2018.