How the global panic of a financial crisis can affect banks in Mexico

"Don't worry, the banking system is solid and your deposits are safe. The money will be available when you need it."

Those few words from US President Joe Biden were enough on Monday to bring calm to the Mexican stock markets and stop the peso from falling that same day, after fears arose in that nation due to the resounding fall of two banks in its neighbor to the north.

But even so, the bad news in the banking sector generated by the bankruptcy of Silicon Valley Bank (SVB) last Friday -which forced the US authorities to intervene to protect customer deposits-, and a subsequent fall of Signature Bank , on Sunday, did not stop worrying Mexicans, aware of that financial proverb that "when the US sneezes, the world develops a bad cold."

Mexico sends a message of confidence

Since Friday of last week, the Mexican currency has fallen 4% and, given fears that the crisis in the banking sector that is currently affecting the US will spread to Mexico and, perhaps, to Latin America, the Deputy governor of the Bank of Mexico, Jonathan Heath, told the Spanish newspaper

that the tremor should not have a notable impact on Mexico's financial system.

According to Heath, quoted by

, "there are intrinsic differences very typical of our system that show few connections with what happened to these banks in the United States."

Heath indicated in an email to which the Spanish newspaper had access that in Mexico "we are monitoring all events very closely and analyzing possible effects."

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"In particular, our General Directorate of Financial Stability carries out continuous analyzes of this type of shock and informs us that they do not find significant impacts," explained the also member of the Central Bank's Governing Board.

For its part, in a statement made public on Wednesday, the National Banking and Securities Commission (CNBV) of Mexico stressed that the banking institutions that operate in the country "have solid levels of capitalization, liquidity and quality in their portfolio of credit”, reported

Mexico, according to that regulatory body, seems shielded because its Liquidity Coverage Ratio —an indicator that allows banking institutions to calculate the money they have to meet their payment obligations during a 30-day period of stress — is 235%.

Drop in shares in Mexican banks

According to a newspaper report, for now

, whose shares fell 4% on Wednesday, a decline that adds to a drop of 13% in the last five days.

To this list is added

and

, whose downward figures represent the last five days.

The most affected is the provider of financial services to companies

which, the newspaper specified, has received a

hit from Thursday to date.

The US also sends a message of calm

With the specter of the 2008 US financial crisis sparked in large part by the collapse of banking giants like Lehman Brother, a financial services firm that filed for bankruptcy that year, it is not surprising that the fears of a similar crisis after the debacle of Silicon Valley Bank and Signature Bank.

[How much did the 2008 crisis cost Americans]

Ready to put a cure on what could be a growing wound, Biden appeared on Monday morning, before the financial markets opened, to send a brief message of confidence in the US financial system, after the Silicon Valley bankruptcy. Bank, in California —the sixteenth largest bank by volume of deposits in the US—, and Signature Bank, in New York.

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Biden said he instructed his team to protect American workers and small businesses,

and taxpayer dollars are not put at risk, despite the fact that the Government will not rescue the affected institutions.

In addition, he confirmed that the leadership of the bankrupt banks will be dismissed and that the Government will take the necessary measures to "reduce the possibility of this happening again."

"All customers with deposits can rest assured that their money will be protected."

The FDIC, the Federal Reserve, and the Treasury Department have guaranteed SVB customer deposits of about $175 billion and Signature Bank customers of about $100 billion.

How safe is your money in the bank?

If you have money stored in a United States bank and it is insured by the Federal Deposit Insurance Corp. (FDIC) and you have less than $250,000 saved, you will be able to access that money, an AP agency note indicated.

Almost all banks are insured by the FDIC, whose logo appears on teller windows or at the entrances of those institutions.

If you have more than 250,000 in a single account, any money over that number is considered unsecured.

In those cases, experts recommend putting the rest of the money in different financial institutions, said Caleb Silver, editor-in-chief of Investopedia, an Internet portal dedicated to financial issues, cited by the AP.

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"You shouldn't be too worried about your money if it's in one of the big banks, and even some regional banks and credit unions," he added.

But if you're still worried your bank could go bankrupt in the future, here's

• Monitor your bank's share price.

• Check the quarterly and annual reports of the financial institution.

• Put an alert on Google in case there is news about your bank.

Despite the recent uncertainty unleashed by bad news in US banking, experts do not recommend taking money out of your account.

It's safer, they told the AP, to keep money at financial institutions than at home, especially when deposits are insured.