UPDATE 1-Mexico's financial system is solid and resilient, stability council says

Reuters · 09/28 01:05
UPDATE 1-Mexico's financial system is solid and resilient, stability council says

Adds detail from statement

- Mexico's financial stability council believes that the financial system of Latin America's No. 2 economy remains solid and resilient, according to a central bank statement on Friday, even as global growth is expected to be down slightly from last year.

The council said the Mexican banking sector's capital and liquidity levels "far exceed" regulatory minimums and that risks related to the external sector's peso-denominated assets are considered to be limited.

"Mexico's financial system remains solid and resilient to face the challenges posed by the current economic situation," it said.

Mexico's peso depreciated some 8% to the U.S. dollar since the council's last session, while aversion to risk has grown amid greater international volatility and uncertainty, according to the statement.

Highly indebted state oil firm Pemex PEMX.UL continues to face challenges related to its credit quality, despite no changes to its guidance or ratings from major credit agencies during the third quarter of this year, it added.

"In this context the Mexican financial system as a whole maintains an adequate capacity to absorb shocks," the council said in the statement, noting that data suggests economic activity performed better in the third quarter compared to the first half of this year.

The council includes the finance minister, central bank board members and the head of the banking commission.



(Reporting by Sarah Morland and Anthony Esposito; Editing by Aida Pelaez-Fernandez)

((sarah.morland@thomsonreuters.com;))