March 30 (Bloomberg) -- Stress tests conducted on Mexico’s banking system suggest it is able to withstand “severe” shocks, the International Monetary Fund said.
Mexican authorities will need to remain vigilant as risks of spillover from global crises remain, the IMF said in a report published on its website.
High concentration in Mexico’s financial system and foreign ownership of major banks pose “important” challenges, according to a summary of the IMF’s study of Mexico’s financial sector. The seven largest financial companies managed about three quarters of total financial assets in June 2011, the report said.
Latin America’s second-largest economy should establish a fixed term for the president of its banking commission and adjust the composition of its board, the IMF said.
Mexico’s economy will grow 3.5 percent this year, according to the Finance Ministry. Central bank Governor Agustin Carstens said in a March 23 interview that gross domestic product will likely expand at the top end of the bank’s 3 percent to 4 percent target range after data in the first few months of the year were better-than-forecast.