Time to settle up

Article Abstract:

The Mexican goverment tackled the 1994-1995 financial crisis through setting up Fobaproa, a state agency which bought overdue loans from banks. Some debtors had not planned to repay their loans, and others did not want to. Only some 30% of this debt can be recovered, and Fobaproa aims to convert the remainder to public debt. The opposition parties oppose this plan, and public opinion is also against it. The National Action Party argues that the banks should fund some of the cost, and the Party of the Democratic Revolution argues that smaller debtors should be treated more leniently than larger debtors.

Banking Institutions, Depository Credit Intermediation, DEPOSITORY INSTITUTIONS, Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Banking Regulation, Banks (Finance), Economic policy, Banking law

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Road to ruin

Article Abstract:

Serfin is likely to have to be rescued by the Mexican government after problems arising from the bank's lending to a road construction project. Serfin was affected by the Asian, Russian and Brazilian financial crises of 1998, and was already in a weak position. Serfin has acute problems, but the sector as a whole has been affected by rising overdue loans. Banks have become fearful of lending. There is a need for a bankruptcy law and a loan guarantee law.

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