Mexico’s Ministry of Finance and Public Credit published the Financial System Stability Council’s updated risk balance following its 62nd ordinary session, concluding that the Mexican financial system remains solid and resilient. The Council attributed this assessment mainly to commercial banks’ capital and liquidity levels, which it said comfortably meet minimum regulatory requirements. The update noted a continued moderation in global activity in the fourth quarter of 2025 and elevated uncertainty around the potential effects of United States tariff measures, alongside differentiated inflation dynamics across advanced economies. It also pointed to relatively stable global financial markets with episodes of moderate volatility, and highlighted that the United States Federal Reserve lowered the federal funds target range in October and December to 3.5 to 3.75 percent. Domestically, local markets were described as orderly with low volatility, with the Mexican peso appreciating slightly more than 2 percent against the US dollar since the previous session; government bond yields rose across most of the curve, particularly at medium and long tenors; and equity indices were broadly unchanged versus end-September. Some non-bank financial entities were identified as having risk indicators that warrant monitoring, but were not viewed as a threat to the financial system. The Council was briefed on the Sustainable Finance Committee’s work, including preparation of its annual report, and held an initial discussion on defining a common macroprudential policy strategy to be included in its sixteenth annual report. That report is due to be discussed and, if applicable, approved at the next ordinary session ahead of publication.

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