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Working Paper
Privatization, competition, and supercompetition in the Mexican commercial banking system
Economic Research Working Paper 9904
Journal Article
Liberalization, privatization, and crash: Mexico's banking system in the 1990's
Although Mexico's 1994 peso devaluation and subsequent capital outflows shook the nation's banking system, the foundations of the banking crisis were laid much earlier. ; Econometric evidence suggests that in the wake of the 1991-92 bank privatizations, Mexico's banks entered a market share struggle in which they incurred short-term losses at the margin, perhaps in the interests of greater expected gains over the long term. ; Euphoric investor behavior and a rising economy may have aggravated the situation by making risky borrowers more difficult to identify.