The Wall Street Journal reported last week that the International Monetary Fund (IMF) has given Mexico investment and Mexico’s financial system a favorable evaluation. 

“Mexico’s banking system is well capitalized and positioned to deal with severe shocks after proving resilient during the 2008-2009 global financial crisis,” stated analysts from the IMF, after completing an assessment of the country’s financial sector in 2011. 

The World Bank also participated in the analysis, which was very positive despite the Mexico’s strong links to the global economy. This is due in large part to Mexico’s demonstrated ability to react promptly and decisively in the event of another severe shock, such as what occurred in 2008.

“Following economic recovery in 2010, stress tests conducted by the IMF suggest the Mexican banking system is able to withstand severe shocks,” stated the IMF. 

Key recommendations from the IMF to Mexico involved improving regulation in a progressively complicated financial system, which will help to provide increased budget autonomy for the country’s Banking and Securities Commission. The IMF believes that this would help increase the breadth of its regulatory control and further stabilize Mexico’s banks. However, the IMF acknowledged that Mexico has made substantial progress already on these fronts since 2006.

The Wall Street Journal also reported that Mexico’s own Financial Stability Committee conducted an assessment of the country’s financial system recently, finding it to be increasingly solid. This analysis found the outlook to be very favorable for Mexico, despite external risks associated with the current uncertainty in Europe. Also, the committee found no evidence of new risks since those that were identified in 2011.

“Since the 2008-2009 crisis, Mexico has increased its foreign reserves to a record $148 billion,” stated the Wall Street Journal. “And has an unused $72 billion flexible credit line with the IMF as protection against severe bouts of financial market turmoil.”