Monthly Archives: February 2012

Narco-security in Mexico – Fat Tail Downside Risk to Financial Markets

Potential changes in Mexico’s internal security situation pose both upside and downside risks to corporates, each with relatively equal, medium likelihood and medium-to-high impact. With relatively lower probability, an extreme deterioration poses substantial broad-based downside risks for currency, credit and equity markets. Continue reading

Advertisements

My Take on Mexican Politics

Formally, Mexico is structured as a federal constitutional republic, consisting of 31 States plus a Federal District, not dissimilar from the US. It has several distinguishing characteristics, however: 1) it combines constitutional separation of powers with a civil law system, 2) consecutive re-election for the same public office is prohibited (although running for an alternative office is both permitted and common), 3) having been dominated by a single-party, PRI (Institutional Revolutionary Party) for 71 years until Vincente Fox of PAN (National Action Party) won the Presidency in 2000, transition to genuine democracy is still incipient. Continue reading

Circles Within Circles

This is a paper I wrote in December 2011 for a course in Global Economic Governance, taught be Kemal Dervis and José Antonio Ocampo.

At a global level, the G-20 has tasked the Financial Stability Board (FSB), successor to the Financial Stability Forum (FSF), with pursuing a macro-prudential mandate in close cooperation with the IMF. The EU established in early 2011 a European Systemic Risk Board (ESRB) to pursue a similar mandate at EU level, while the UK is creating a Financial Policy Committee (FPC), on a par with the Monetary Policy Committee, at the Bank of England.

In this paper, I compare and contrast their mandates, capacities, modus operandii, impact to date and perspectives for the future.