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LatinNews Daily - 21 December 2020

In brief: Mexico’s financial authorities issue warning

* Mexico’s financial system stability council (CESF), which comprises various financial institutions, including the finance ministry (SHCP), the central bank (Banxico), and the national banking and securities commission (CNBV), has issued a new report which warns that due to ongoing uncertainty caused by the coronavirus (Covid-19) pandemic and its impact on the economy, certain risks could “intensify” and affect the “appropriate functioning” of Mexico’s financial system. The CESF warned that the effects of the pandemic on the credit portfolio for the most vulnerable sectors are still uncertain. It also highlighted the risks of a slower recovery of the domestic economy, a possible recomposition of international capital inflows towards less risky assets, as well as possible adjustments in Mexico’s sovereign credit ratings and those of the state-owned oil company, Pemex. The CESF also analysed the evolution of the perception of the main risks facing Mexico’s financial system on the part of the main financial intermediaries, and found that the perception of risk for institutions remains at levels considerably higher than those registered before the pandemic, but slightly lower than those registered in the first half of the year.

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