(Hard to tell if this is part of "getting Mexico back on its feet" as Rayelan (I think it was?) mentioned would be one of the things that would happen first as the world's scales are brought back to balance - or just more banker siliness. :)
Mexican bankers ask government to enforce laws
ACAPULCO, Mexico
(March 31, 2001 3:04 p.m. EST ) - As banks struggle to recover from Mexico's worst financial crisis and regain the public's trust, Mexican bankers are lobbying the government for better enforcement of laws.
The call for cleaner government at the annual Mexican Bankers Conference, which ended Saturday, comes as many Mexicans are still wary of banks.
A mountain of bad debt, most given out after the country's banks were privatized in the early 1990s, forced the government to pledge $100 billion in 1995 to rescue the failing industry.
The taxpayer-funded bailout, which shored up private commercial banks by buying their bad loans at above their real value, has been widely criticized.
Several government-rescued banks also have been accused of making loans to companies owned by their top officers or their friends, fueling accusations that the bailout was simply a way to funnel money to the rich.
But at their annual convention, bankers called on Vicente Fox - Mexico's business-friendly president - to continue his efforts to fight widespread corruption and cronyism.
"Mexican society, unfortunately, has learned that everything is negotiable and that the law applies only when it is convenient for those who govern," said Mexican Bankers Association president Hector Rangel.
"We don't necessarily need more laws," Rangel said. "What we need are that the laws we have are enforced."
That's a far cry from the attitude less than 10 year ago, when many banks lacked even minimal controls, said Philip Guarco, vice president and senior credit officer at Moody's Investor Service.
"You privatized the banks, but you had no real bankers," he said.
As they slowly recover from the crisis, banking officials have already achieved one of their main goals: a law approved last year that speeds up the bankruptcy process. In the past, it took years for banks to repossess cars and houses when debtors fell behind on payments.
Last year the industry showed promising signs of recovery, including several consolidations that brought in needed capital.
Spanish banking giant Banco Bilbao Vizcaya Argentaria merged with Mexico's second-largest bank, Bancomer, while BBVA's top Spanish rival, Banco Santander Central Hispano, acquired Serfin, Mexico's third-largest bank.
The trend has forced many Mexican banks to become more competitive. As a result, many bankers spent this year's convention talking about ways to streamline regulations and reduce their tax burden.
They also talked about the need to expand credit.
Banks have been extremely reluctant to begin giving out more loans, still smarting from the financial crisis.
Yet more have been offering credit cards and car loans, with heavy restrictions. And credit is expected to increase with the fall of interest rates, which were above 100 percent after the peso was devalued in 1994.
In addition, there appears to be continued optimism about the Mexican economy, even amid fears of a recession in the United States - the market for nearly 85 percent of Mexico's exports.
Our economy "has been able to overcome - with stability - the recent volatile episodes of the international financial markets," Fox said in a speech opening the convention.
On Friday, Bank of Mexico Gov. Guillermo Ortiz said the country had attracted $10 billion in capital in the first quarter, helping increase the peso's value nearly 3 percent since the beginning of the year.
With the economy seemingly stable and the banking industry now focused on how it can fight its way out of a crisis, the outlook for Mexican banks has been positive.
"We have the first opportunity where they can behave like real banks," Guarco said.
News Copyright © 2001 Interest!ALERT
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