|dc.description.abstract||After WWII, the Mexican government took increasingly the control over the economy including the banking sector in 1982. By 1985, a worsening economic crisis forced the government to begin a process of economic liberalization. The 1994-1995 financial crisis prompted efforts to develop a sound prudential framework for Mexico’s financial system. Toward this goal, liberalization in financial services is vital for developing countries to make their build financial systems viable and their economies stronger. Related economic legal reform scholarship indicates that safe and sound financial markets are built upon the effective implementation of key “international prudential standards”. In 1995, Mexico started to work domestically, from the “bottom-up”, in financial sector reform, while applying step by step international prudential standards and opening unilaterally the sector to foreign investment, even ahead of the liberalization agreed in NAFTA.
NAFTA’s and MEFTA’s innovative chapters on financial services, with their various dispute resolution mechanisms, are examples of Mexico’s commitment to promoting high levels of cooperation at the bilateral, regional and hemispheric levels. At the global level, as part of G20, Mexico has promoted a financial system reform approach that continues liberalization with financial stability and sustainable economic development. This thesis argues that Mexico’s case demonstrates that financial liberalization and related structural reform need to be integrated in a coherent and coordinated policy manner, and be effected in an enlightened country-specific (bottom-up) and sequenced manner. This must be applied within a wider financial stability framework combined with sustainable, equitable economic policies consistent with a country’s particular developmental stage.
Fifteen years after Mexico began its financial liberalization agenda, the Global Financial Crisis has demonstrated that such a process can deliver a stronger and more stable financial system. Mexico should therefore not backtrack on its commitment to the prudential liberalization of its financial sector but use the crisis as a basis for further meaningful reform and policy readjustment to create further substantial and sustainable liberalization and regeneration longer term.||en_US