The Mexican Banking Crisis Lives On
Eight years after the government's banking intervention, the Mexican public still lacks a full accounting of the costly decisions taken to stabilize the country's financial system.
The aftershocks of the systemic crisis in Mexico's banking
system that followed the peso crash of 1995 can still be felt
today. At the time, the recently inaugurated government of
Ernesto Zedillo implemented a series of measures and programs
to avoid bankruptcy and safeguard the savings deposited in all
banks. In the end, the government managed to maintain
confidence in the banking system, recapitalize the banks, and
restore growth in the country's economy after its dramatic
collapse in the first half of 1995.
Nevertheless, the government took many arbitrary and
discretionary actions due to inexperience and the need to
implement effective measures urgently. This not only left a
very high domestic debt, but also a bitter aftertaste and many
doubts surrounding the legality and ethics of what was done.
Eight years have passed and the issue is still on the front
page of most newspapers. Its ultimate resolution remains
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