The foreign banks in Mexico: diversification of activities and his effect in the structure of income

Abstract

This paper discusses the profound changes in financial systems that have modified thelinkages between banks, capital markets, businesses, and households. The main impact offinancialization on the banking structure has been the development of large multinationalfinancial corporations that have expanded worldwide and modified their key banking activitiesas well as their income.The main argument of this paper is that although foreign multinational corporationshave become dominant in developing countries, and the banking structure and bank activitieshave been diversified, especially in Mexico, their major income sources still derive frominterest income. It further argues that in Mexico, specific banking activities (although notbank operations overall) have oligopolistic structures. These activities are the major incomesources for banking institutions, and the entrance of foreign multinational corporationsinto the banking market did not change this condition.