After the bankruptcy of Silicon Valley Bank -the number 16 that operated in the United States-, the National Banking and Securities Commission (CNBV) assured that the banking system in Mexico is healthy and well capitalized.
“The banks that operate in Mexico have solid levels of capitalization, liquidity and quality in their credit portfolio,” he stressed.
In a statement, he explained that the banking system that operates in Mexico has significantly high levels in its Liquidity Coverage Ratio (CCL), with an average of more than 235 percent.
Similarly, he highlighted that none of the local systemically important banks (BBVA, Banorte, Santander, Citibanamex, HSBC and Scotiabank) have a significant concentration in larger volume depositors or in any sector of economic activity in particular.
“In Mexico, the deposit structure of banks shows an appropriate diversification with respect to the economic sectors served, as well as a very solid base of retail depositors, which makes it diametrically opposed to SVB’s deposit portfolio. Due to the above, it would be difficult for SVB’s bankruptcy causes to be replicated in Mexico”.
The CNBV reported that it will continue to monitor that the liquid assets reported by the banks do indeed comply with their main characteristic: that they can be sold very easily without any significant loss in value.
He stressed that, for the moment, it is not expected that in our country there will be an effect of distrust that motivates depositors to withdraw their money from any particular institution to deposit it in another, nor that they withdraw their money to transform it into another type of asset. or keep it in cash.
He pointed out that in Mexico the liquidity regulation applies generally to all institutions and adheres to the Basel III standards, while in the United States it is applied proportionally.
potential risks
The CNBV recalled that on March 10, the immediate effect on the Mexican financial sector of this case was a loss of value in some of its shares, and explained that this price decrease was a result driven by the announcement of the closure of operations and intervention of the financial authorities of the United States in Silicon Valley Bank.
“The effect is mainly due to the decision of institutional investors to reduce their position in banking institutions globally and not because they perceive special risks in Mexican banks,” he explained.
Regarding market risks, he said that temporarily volatility could be observed both in interest rates and in the exchange rate, but that Mexican banks have coverage for this type of risk.
“In recent stress tests, no bank shows significant losses in the face of a shock event in market risk.”
Similarly, the regulatory body pointed out that, in terms of direct exposure of credits, in Mexican banks there is no relevant one with SVB.
“The CNBV has been and will be monitoring the possible contagion of this bank to larger banks.”
Finally, he specified that Mexican banks do not show any significant concentration in companies in the technology sector or in startups from the United States.
The commission reported that it will continue to monitor that the liquid assets reported by the banks do comply with their main characteristic: that they can be sold very easily without any significant loss in value.
