Mexican Legal Framework of Business Insolvency - White & Case

27. Resolution Alternatives and Systemic Importance
The Financial Stability Committee, or CEF, formed by high-ranking officers from the Ministry
of Finance, or SHCP, along with Banco de México, CNBV and IPAB, is entrusted with
determining whether a bank is systemically important and what percentage of the bank’s
non-IPAB-insured liabilities are susceptible to systemic repercussions. A bank shall be
systemically important if failure of such bank to meet its obligations would (1) generate
serious negative effects in other banks or other financial system firms in such a manner that
it puts their stability or solvency in peril, if such an event would affect the stability or solvency
of the financial system; or (2) jeopardize the functioning of the payment system [LIC 29 bis
6, 29 bis 8].
A bank that meets the commencement standards (cfr. 23) would be subject to resolution.
The type of bank resolution technique would depend on whether the bank in question
is systemically important. Non-systemically important banks are subject to winding up
and, if applicable, liquidation. Systemically important banks would be subject to bank
restructuring or purchase-and-assumption techniques. Bank restructuring is available if the
CEF determines that 100 percent of the bank’s non-IPAB-insured liabilities are susceptible
to systemic repercussions, and purchase-and-assumption techniques are available if the
CEF determines that less than 100 percent of the bank’s non-IPAB-insured liabilities are
susceptible to systemic repercussions [LIC 122 bis].
28. Winding Up and Liquidation
A bank would be wound up if (1) the bank meets any commencement standard; and (2) the
CEF does not make a determination that the bank is systemically important [LIC 122 bis-I].
Winding up is also available in the case of voluntary winding up and in the case of revocation
of the bank’s license for reasons unrelated to insolvency, which are not addressed herein.
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