A Young Man with a Mission

Sep 1, 2004

Guillermo Babatz wants to revolutionize Mexico's mortgage industry and reshape the country's capital markets, too.

Guillermo Babatz
Guillermo Babatz has a big job on his hands. After traveling the fast track in a number of senior positions at Mexico's Finance Ministry, known as Hacienda, the 35-year-old Harvard-educated economist was appointed two years ago as director-general of the newly created federal mortgage agency, Sociedad Hipotecaria Federal (SHF). 

SHF's debut was accompanied by widespread speculation about its role. Babatz describes that mission simply: to create a secondary mortgage market.

And securitization should be the mechanism of choice to finance mortgages, meaning mortgage-backed securities (MBS) would become the backbone of Mexico's capital markets. "That's for a simple reason. The social security reform of 1997 implies that the great majority of financial saving in this country will flow through institutions like Afores [privately-managed pension funds] and...

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