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Mexico Opens Its Financial System to Foreign Companies

October 18, 1994|From Reuters

MEXICO CITY — Mexico opened its financial system to the world Monday when Finance Minister Pedro Aspe announced that 52 foreign financial institutions will be allowed to operate in the country.

The institutions include 18 banks, 16 brokerage firms, 12 insurance companies, five holding companies and one leasing company, he said.

Aspe said the firms will bring $1.21 billion in direct investment to Mexico in the first half of 1995, when they are expected to be in operation.

The opening of the financial system came as part of the economic reforms of President Carlos Salinas de Gortari and accords reached under the North American Free Trade Agreement.

Aspe said the new banks will bring added capital and competition, lower the cost of credit and stimulate economic growth.

The government received 102 applications from foreign firms seeking Mexican operations, which historically have not been allowed, except for Citibank, which has had limited banking operations here since 1929.

The list of new banks is heavily weighted with U.S. institutions, including Citibank, which will also have a brokerage, holding company and the lone leasing company; J.P. Morgan, Republic National Bank of New York, NationsBank, Chemical Bank, Bank of America, Chase Manhattan, Bank of Boston, First Chicago and American Express.

Among those granted licenses for brokerage firms were Goldman Sachs, Bear Stearns, Merrill Lynch, Lehman Bros., J.P. Morgan, Bankers Trust, Deutsche Bank, Morgan Stanley, Swiss Bank, Indosuez, James Capel and Baring Securities, Aspe said.

Mexico now has 37 banks, all of them Mexican-owned except for Citibank.

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