Tossing A Lifeline To Mexico's Biggest Banks

Even Banamex and Bancomer are getting a state bailout

Mexico's yearlong economic crisis has been murder on the country's banking system. The government has been forced to take over six banks and bail out nine others. But the prevailing wisdom was always that the system's crown jewels, Banamex and Bancomer, would easily weather the storm. Now they, too, are in sufficient distress that the government is preparing to assume chunks of their troubled loan portfolios--and those of two other banks. The cost: more than $4 billion on top of the $11 billion the government has already spent on bailouts. The government effort has grown so massive that some critics are saying that the banks are being gradually renationalized.

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