Abstract

CASTANEDA OROZCO, Ricardo David  and  JUAREZ-LUNA, David. Analysis of the (re)composition of the Mexican financial system in the period 2007-2014. Econ: teor. práct [online]. 2017, n.47, pp.135-166. ISSN 2448-7481.  https://doi.org/10.24275/etypuam/ne/472017/castaneda.

This paper studies how the Mexican financial system has changed. We use Markov chains to analyze the transitions the Mexican financial sector has experienced in the period 2007-2014. The main result shows that, although the number of financial institutions increased considerably, a new financial institution is highly likely to adopt the structure of an unregulated multi-purpose financial entity (Sofom ENR). The growing tendency to incorporate as Sofom ENRs, under an unregulated framework, may entail certain risks for the Mexican population. This in turn suggests that the authorities should consider measures relating to Sofom ENRs, such as: increasing restrictions on founding such entities, pressuring them to change to regulated entities, or adapting the regulatory framework to make them more competitive and reliable.

Keywords : Transitions; Markov chains; Regulation..