The development of the Mexican financial system as it has related to the remarkable growth of the Mexican economy is examined in this book.

Believing that a better understanding of the past will permit a more nearly accurate appraisal of contemporary problems and facilitate the choice of intelligent policies in the future, the authors present a detailed chronicle and analysis of components of the Mexican financial system, with primary emphasis on the period from 1940 to the mid-1960s.

Separate chapters are devoted to the money and capital market, the formulation and execution of monetary and financial policies, and the nature of Mexican financial experience in both the public and private sectors of the economy. The authors offer a theoretical explanation of the record of Mexican experience, based upon their analysis of relationships between monetary policy, domestic stability, and external equilibrium, as well as upon their analysis of factors governing the growth of domestic indebtedness, the development of financial intermediation, and the operation of the loanable funds market. The final chapter of the book, a review of Mexican experience from 1960 to 1965, speculates with respect to the future course of Mexican financial development and offers specific proposal for future monetary and financial policies.

This record of Mexican financial development contains much that should be of interest to others engaged in related theoretical and empirical studies, including many lessons for those countries confronted with circumstances and problems not too unlike those encountered in Mexico.

• Preface
• Acknowledgments
• List of Tables
• List of Charts and Diagrams
• Part I. The Early Stages
  • Chapter I. Development of Financial System prior to 1940
    • Introduction
    • Prerevolutionary System
    • Destruction and Reconstruction
    • Circumstances at the End of the 1930s
    • Conclusion
• Part II. The 1940–1960 Period—History
  • Chapter II. Money and Capital Market
    • Introduction
    • Institutional Development
    • Financial Instruments
    • Securities Market
    • Conclusion
  • Chapter III. Monetary and Financial Policy
    • Introduction
    • Objectives and Procedures
    • Instruments of Control
    • Factors Governing Policy Measures
    • Conclusion
  • Chapter IV. Monetary and Financial Experience
    • Introduction
    • Money, Prices, and the Balance of Payments
    • Public and Private Finance
    • Financial Sector
    • Conclusion
• Part III. The 1940–1960 Period—Analysis
  • Chapter V. Internal Stability and External Equilibrium
    • Introduction
    • Behavior of Money and Quasi-Money
    • Control of the Money Supply
    • Control of Quasi-Money
    • Monetarist-Structuralist Controversy
    • Conclusion
  • Chapter VI. Financial Processes and Economic Growth
    • Introduction
    • Growth of Domestic Indebtedness
    • Development of Financial Intermediation
    • Savings, Capital Formation, and Output Growth
    • Operation of Loanable-Funds Market
    • Conclusion
• Part IV. Developments since 1960
  • Chapter VII. Recent Experience and Future Development
    • Introduction
    • Review of Experience since 1960
    • Significant Trends and Fundamental Problems
    • Toward a More Efficient Financial System
    • Conclusion
• Guide to Further Reading
• Index