Foreign ownership in Mexican Banking: A Self- Correcting Phenomenon
AbstractCurrently, foreign banks own the banks that hold about 80 percent of the assets in Mexican banks. The paper argues that this is the third instance in which foreign-owned banks have initially comprised a large part of the Mexican banking system, and that in the first two cases (1865-1910 and 1920-1935), the degree of foreign ownership will recede. The argument is that reform and competition among the banks will cause the conditions that attracted the foreign banks to erode and the domestic banks to be able to grow more rapidly. Therefore, in subsequent decades many foreigner owners are likely to sell their subsidiaries to local banks and investors. Thus over time the ratio of assets in foreign-owned banks to total banking system assets should decline, even in the absence of government policies that aim for that result.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 586.
Date of creation: 2006
Date of revision:
Mexico; foreign banks; ecological succession; banking history;
Find related papers by JEL classification:
- N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-BAN-2006-11-12 (Banking)
- NEP-HIS-2006-11-12 (Business, Economic & Financial History)
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