Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

A couple of thoughts. Certainly these home-versus-host issues bedevil many, many discussions of banking issues right now. They are true in Mexico, as you suggested, and they are true in spades in Central and Eastern Europe, where instead of U.S. banks there are European banks in the tension between the home and host. So these considerations are very relevant and also exceedingly complicated.

If the Bank of Mexico or the Mexican authorities move to address tensions in their financial system, the standard that has been set by several Federal Reserve actions, the Brits in the things they have done, and I believe a number of the other countries is to include subsidiaries of foreign firms that are operating in that country. So, for instance, for the United States, Deutsche Bank’s U.S. subsidiary has had access to our various facilities, and that has been the coin of the realm in the announcements today. So my feeling is that Banamex, which is owned by Citi, would have the same access to these kinds of facilities as other Mexican institutions. Now, there is no guarantee of that, but that would be my feeling. Regarding the question of, once a Mexican institution gets its hands on dollars, what happens to those dollars, my understanding is that they can move around. In fact, in a discussion, Guillermo Ortiz indicated that to date Mexican institutions were net suppliers of dollars to the United States rather than the other way around.

Keyboard shortcuts

j previous speech k next speech