DOI link for General Comments
General Comments book
Discussions of Mexican financial liberalization should be imbedded in bilateral negotiations between the United States and Mexico in which the goal is to reach complementary agreements on bi-national flows of capital, labor and goods. The World Bank has made financial liberalization an explicit condition of structural adjustment loans. A scenario of foreign bank entry and increasing competitiveness on the part of domestic financial enterprises is often sketched, but various questions about the politics of this process again immediately spring to mind. The tremendous variation in competitiveness between the state-owned commercial banks and privately-owned non-bank financial institutions naturally creates disparities of interest and policy preference among diverse and potentially politically powerful actors in the financial community. Emphasizing such limitations is just one of many possible considerations in planning a political strategy for financial reform. The political symbolism of opening a partly nationalized financial system to foreign banks could easily become fodder for the PRI’s opponents.