The Bank of Mexico (Banxico) assured that despite an international environment with lower growth in the world economy, growing geopolitical tensions and the beginning of a cycle of adjustments in the monetary policies of advanced economies towards less restrictive positions, the Mexican financial system maintains a solid and resilient position.
“For the second half of 2024, the Mexican financial system continues to maintain a solid and resilient position despite the complex global environment prevailing during the period that has been characterized by national and international financial markets that have had periods of volatility, among other factors. , due to greater risk aversion due to the possibility of an escalation of geopolitical conflicts,” said the governor of Banxico, Victoria Rodríguez.
During the presentation of the Financial Stability Report, December 2024, he added that in recent months, trade tensions have also worsened and Mexico’s financial conditions still remain in the restriction zone, but it is estimated that inflation will decline towards the goal. of 3%, although with risks.
However, he noted, based on the macrofinancial vulnerabilities index (early warning indicator), it is determined that as a whole the Mexican economy does not present substantial vulnerabilities in any sector analyzed: financial, real, external and public.
Among the risks identified in the financial system and their evaluation, the central bank highlighted that cyber risks related to the growing use of Artificial Intelligence (AI) and the digitalization of finances are a global concern, but assured that the levels of cybersecurity in Mexico are suitable.
Furthermore, climate risks impose risks for the stability of the financial system as a whole, which is why Banxico, together with other authorities, monitors and evaluates the adverse impact they could have on the economy and the financial sector.
Risks to monitor
Banxico monitored the vulnerabilities and imbalances that could affect the financial system and identified that certain external risks have increased and other internal risks persist, among which are: surprises occurring in the trajectory of global financial conditions with respect to what was expected and a increase in geopolitical tensions or trade conflicts.
Other risk factors are related to the materialization of a systemic event with implications for the global financial system; a further weakening of the national economy; and unanticipated adjustments to the credit ratings of relevant domestic issuers.
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