ABSTRACT
The Mexican financial crisis, which occurred in December 1994 and proceeded until the first quarter of 1995, was the fine example to show a close relationship between domestic prosperity and financial internationalization in a Third World country. 1 Mexico has tried to open her financial system in the belief that it would contribute to further her prosperity (Back 1994; Grinspun and Cameron 1996). However, the crisis came as a surprise. It destroyed Mexico’s prosperity as well as her sovereignty. The Mexican economic system actually collapsed in 1994. Only the international financial package of $53.8 billion led by the United States could calm the crisis. The Mexican financial system became under the supervision of the U.S. Treasury. Therefore, many observers began to scrutinize the effects of globalized financial system. Did Mexico afford the effects of her internationalization? If international financial markets have their own motivations and logic in relation to the Mexican conditions, how can one of newly industrializing countries (NICs) such as Mexico follow up it? 2
