Karla Siller Ojeda, Director General Comisión Nacional Bancaria y de Valores kicked off the with a Keynote Introduction that resonated throughout the day as it gave us a good understanding of the history of regulation in Mexico and the road ahead for local banks. During the crisis, the Mexican banks were sheltered and did not have the same exposure as other banks. With changes came reform.
Today many challenges still face Mexico including bifurcation of liquidity, SEF difficulties around US and NON US persons and international co-operation on new regulation. The road ahead for Mexico is clear. New rules will be reviewed for adoption, local markets will need to clear through central counterparties and Banca de Mexico continues work on settlement and clearing services clients can work with. The aim is to have a transparent systematic marketplace that protects the public.
The first panel of the day Titled “Looking at the Bigger Picture” explored the macro economic climate and how changes to the global economy will affect the Mexican markets. MXN represents the next big opportunity, and will appreciate by year-end but be careful what you wish for. The more a country opens up, the more skeletons are visible.
The third panel tackled The Shifting Regulatory Environment. Clearing products are alive and well but without a mandate clients can still choose how they will execute their business. The lag in the regulatory time line also means that participants who are outside the US can choose how they will trade until regulation catches up in their time zone, with Off SEF trading popular in Europe and Asia due to the now evident bifurcation of liquidity. Mexico City in an important growth market hub during the US time zone for Non-Sef Liquidity.
Alfredo Sordo, Director of Domestic Operations at Banco de Mexico, brought the day to a close. Key indicators show that MXN is worthy of its ranking in the BIS survey. Trading conditions in the Peso are resilient, including a improved e-trading ratio for MXN denominated products at 67% vs 33% Voice. At number 8 today, how high can MXN go?