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The Technical Process of Bank Privatization in Mexico


  • Haluk Unal
  • Miguel Navarro


The paper describes the process of Mexican bank privatization that took place in 1991. It is shown that the Mexican government was very careful to ensure due procedure and transparency through the entire bank privatization process. However, lack of legal and regulatory framework and lax oversight shadowed the success of the technical process. Hence, the financial system in Mexico had to deal with a banking crisis, shortly after their privatization, in 1994.

Suggested Citation

  • Haluk Unal & Miguel Navarro, 1999. "The Technical Process of Bank Privatization in Mexico," Center for Financial Institutions Working Papers 97-42, Wharton School Center for Financial Institutions, University of Pennsylvania.
  • Handle: RePEc:wop:pennin:97-42

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    References listed on IDEAS

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    8. Rotemberg, Julio J & Saloner, Garth, 1987. "The Relative Rigidity of Monopoly Pricing," American Economic Review, American Economic Association, vol. 77(5), pages 917-926, December.
    9. Mitchell A. Petersen & Raghuram G. Rajan, 1995. "The Effect of Credit Market Competition on Lending Relationships," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 407-443.
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    11. Joseph P. Hughes & William W. Lang & Loretta J. Mester & Choon-Geol Moon, 1996. "Safety in numbers? Geographic diversification and bank insolvency risk," Proceedings 504, Federal Reserve Bank of Chicago.
    12. Berger, Allen N. & Udell, Gregory F., 1990. "Collateral, loan quality and bank risk," Journal of Monetary Economics, Elsevier, vol. 25(1), pages 21-42, January.
    13. Clive D. Fraser, "undated". "Safety in Numbers," Discussion Papers in Public Sector Economics 96/9, Department of Economics, University of Leicester.
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    Cited by:

    1. Canales, Rodrigo & Nanda, Ramana, 2012. "A darker side to decentralized banks: Market power and credit rationing in SME lending," Journal of Financial Economics, Elsevier, vol. 105(2), pages 353-366.
    2. Megginson, William L., 2005. "The economics of bank privatization," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 1931-1980, August.
    3. Shanti Chakravarty & Jonathan Williams, 2013. "Privatisation of Banks in Mexico and the Tequila Crisis," Working Papers 13012, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    4. Omran, Mohammed, 2007. "Privatization, State Ownership, and Bank Performance in Egypt," World Development, Elsevier, vol. 35(4), pages 714-733, April.
    5. Tschoegl, Adrian, 2006. "Foreign ownership in Mexican Banking: A Self- Correcting Phenomenon," MPRA Paper 586, University Library of Munich, Germany.
    6. Rubén Hernández-Murillo, 2007. "Experiments in financial liberalization: the Mexican banking sector," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 415-432.
    7. Maudos, Joaquín & Solís, Liliana, 2011. "Deregulation, liberalization and consolidation of the Mexican banking system: Effects on competition," Journal of International Money and Finance, Elsevier, vol. 30(2), pages 337-353, March.
    8. Boubakri, Narjess & Cosset, Jean-Claude & Fischer, Klaus & Guedhami, Omrane, 2005. "Privatization and bank performance in developing countries," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 2015-2041, August.
    9. Alejandro Reynoso, 2002. "Using Signal Processing Tools for Regulation Analysis and Implementation," Working Papers 0203, Centro de Investigacion Economica, ITAM.
    10. Haber, Stephen, 2005. "Mexico's experiments with bank privatization and liberalization, 1991-2003," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 2325-2353, August.
    11. Stephen H. Haber & Aldo Musacchio, 2013. "These Are the Good Old Days: Foreign Entry and the Mexican Banking System," NBER Working Papers 18713, National Bureau of Economic Research, Inc.

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