Mexico banking system robust, unaffected by SVB fallout: Mexico’s banking association

Illustration shows SVB (Silicon Valley Bank) logo

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 Reserver created an emergency program to guarantee deposits and try to stem further financial contagion.

(Reporting by Valentine Hilaire and Noe Torres; Editing by Anthony Esposito)