By Valentine Hilaire and Noe Torres
MERIDA, Mexico (Reuters) -Mexico’s banking system is robust and strong, and has not been affected by last week’s sudden collapse of Silicon Valley Bank in the United States, the president of the Mexican banking association (ABM) told Reuters on Wednesday.
Fears of contagion sparked a sharp drop in the shares of Mexico’s main banks since the collapse, but ABM chief Daniel Becker attributed the price moves to perception and not reality.
“It is not uncommon for it to generate nervousness and drag some fear, but this is more due to a domino effect, a perception, than to a reality of what could happen in the Mexican financial sector,” Becker said during an interview.
After the failure on Friday of Silicon Valley Bank and on Saturday of Signature Bank, the U.S. Federal Reserve created an emergency program to guarantee deposits and try to stem further financial contagion.
“There is nothing to worry about but it is important to be proactive and see the evolution of the system as a whole,” Becker added.
The Mexican banking system has a “solid” position and entities maintain liquidity levels that “comfortably exceed” the regulatory minimums, based on the Mexican central bank’s latest financial stability report.
Fears of contagion caused tremors across stock markets around the world, with Swiss bank Credit Suisse’s shares dropping by as much as 30% at one point Wednesday, leading to a 7% decline in the European banking index.
(Reporting by Valentine Hilaire and Noe Torres; Editing by Anthony Esposito and Jane Merriman)
