The savings protection banking fund is one of the most controversial chapters in Mexico’s economic history. Designed to avoid bankruptcy of the banking system, it became the most forceful tool for transfer of private debt to public obligation in the country’s history. Thirty years later, that bill is still paid.
In 1990, the government of Carlos Salinas de Gortari created the fobaproa as a preventive fund to protect the savers in case of crisis. Its real function was revealed to the crisis of 1994-1995, when the devaluation of the weight, the excessive increase in interest rates and the massive withdrawal of foreign capital put the financial system to the bankruptcy.
As president, Ernesto Zedillo made the decision to activate the fobaproa not only to save the savers, but to rescue the banks. The problem was not to try to avoid a bank collapse, but how it was done, who was protected and with what level of transparency.
And that fund – aBsorbent of 552 billion pesos in private debts – returned to the center of the debate and public conversation. Even when no one put on the table the possibility of canceling debt payments, at the 88 Banking Convention, the bankers considered “very serious” if that happened.
President Claudia Sheinbaum had made it clear: “It is not trivial to say that it would not be paid, because it has very important implications for the Mexican economy.” Stop paying would mean sending a sign of sovereign non -payment to international markets, which would affect Mexico’s credit qualification, would raise the cost of external debt and limit access to future financing.
The decision to convert private debt into public was endorsed by the PRI and PAN in Congress. The PRD, then opposition, opposed. Andrés Manuel López Obrador came to call him “the greatest robbery of the nation.” An opaque rescue, with social effects and whose cost still extends to 2050. audit it has been impossible.
When in 1998 the fobaproa became the Institute for Banking Savings Protection (IPAB), the only thing that changed was the name: the debt remained and its payment was practically perpetuated.
The official narrative held the inevitable of that rescue. The other face, silenced for years, shows a disproportionate measure, which could have been structured without transferring the entire risk to citizens, although, in consistency with the central argument of Zedillo, no one has said or will say that it will not be paid.
The fobaproa became a perfect trap. The question is no longer whether it was a mistake. The questioning is why three decades later no one has rendered accounts?
About the author:
Salvador Guerrero Chiprés is general coordinator of the Command, Control, Computing, Communications and Citizen Contact Center (C5) of Mexico City.
www.c5.cdmx.gob.mx
Twitter: @C5_CDMX
The opinions expressed are only the responsibility of their authors and are completely independent of the position and the editorial line of Forbes Mexico.
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