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 →

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.