The old roles of banks are borrowing money from economic agents with money surplus and lend it to economic agents who need money; this is the fundamental formula. However, the operations of banks are based on other economic principles, as the follow four:
· Solve partially a selection adverse problem. Banks plays a key role because they are specialized on evaluation of borrowers’ risk and the risk assessments of money’s destination. These activities minimize the prices of credits by reducing asymmetric information between borrower and lender, making impersonal this kind of operations.
· Make possible risk diversification. By raising money from many sources and lending the money to many lenders, with many purposes, the banks allow reduce as much as possible business risks, leaving the system risk as low as it’s possible.
· Design financial products matching expectations of borrowers and lenders. By syndicating financial resources, banks provide resources to high scale products with adequate timing; it’s not easy find a unique investor whom borrow its money to the build a hotel with low interest rate, during 20 years. The banks solve this by raising money by many sources with different maturity.
However, there are always gaps to fill between supply and demand of financial resources; there are niches, and mainly, in developing countries as Mexico. There are not only financial intermediaries “too big to fail” (using a fashionable expression); but there are also banks “too big to fill all market niches”; that is the reason why credit unions and other “mini” banks are growing in Mexico. That is the reason, aside of regulations, incentives and other structural variables, that in United States work more than 8,000 banks. In this aspect is possible that Mexico’s economy is working with below of its potential financial services; losing a opportunity to promote economic development throughout the country. In 1978, Mexico had 134 financial intermediaries registered as Banks; currently, only 48 banks are working.
On the other hand, the demand for financial services to attend some niches in Mexico, had incentive the creation of Unions of Credit and other financial organizations. However, this kind of “mini” banks don’t enjoy the same facilities as big banks have, the same supervision, the level of access to other channels of financing, insurance against systematic risk, and they are not part of the inter-banking web of resources transferences. Those elevate all the kind of cost, increase risk, and reduce the ability of supervisors to see any risky development.
Banking system must find themselves the market niches to invest money and raise money. However, government agencies must be design careful the incentives toward the creation of regional banks to fill all the niches forgotten by the big banks.
1 comentario:
Regional banks could be developed as Spain did, even the U.S.' scheme might work in Mexico where only a few banks have business nationwide.
Another aspect that is coming to light is the fact that all big-banks in Mexico are based in countries with an excess of consumption: U.S.' Citibank, Spain's Santander and BBVA, UK's HSBC.
Maybe German banks are in position to explore new niches in credit markets. Sadly, Mexico has only one and has just started operations.
In a different fashion form the 80's but true still, is the fact that the excess of supply of resources should be addressed to development countries, this will push up exports from deficit-Nations, and up life quality of surplus'.
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