ABSTRACT
The objectives established for guiding the planning of financial policies were promotion of domestic savings and efficiency in resource allocation, consolidation of financial system institutions, and re-ordering of external financial relationships. Underlying the caution that has been manifested by Mexican authorities with respect to financial sector reforms is the fact that the policy problem is multi-dimensional and therefore fairly complicated. Considerable ingenuity and forcefulness will be required to facilitate further restructuring of financially distressed situations in consistency with the government’s new development strategy. The existing institutional arrangements for supervision and regulation of financial sector activities appear to be rationally structured and adequately extensive. The final observation to be made with respect to the “progressive liberalization” agenda is that Mexico’s ability to reform the financial sector in these directions is fundamentally dependent on success of the financial stabilization program and, particularly, its fiscal and monetary policy elements.
