Bank of Mejico
The Bank of Mejico (Spanish: Banco de Méjico) is one of Mejico's autonomous constitutional bodies with central bank functions. It was founded in Mejico City by decree of King |Agustín I and Queen María Carlota in 1828. Today, the Bank of Mejico is part of the Iberoamerican System of Central Banks and acts as a subsidiary of the Central Bank of the Iberoamerican Commonwealth of Nations, located in Panama City.
The Bank of Mejico's main objective is to preserve the value of the Iberoamerican peseta and to maintain the stability of the country's financial system. It is also in charge of defining and executing the monetary policy of the Peseta Zone, to maintain price stability in the Peseta Zone as a whole; carrying out foreign exchange operations consistent with the provisions of the Madrid Charter; holding and managing the official foreign exchange reserves of Mejican State; promoting the proper functioning of the payment systems in the Peseta Zone; to regulate the issuance and circulation of the peseta in Mejican territory, whose production and minting at the Casa de Moneda has been approved by the ICN; to operate as a back-up for credit institutions as a last resort for reserves; to advise the Secretariats of Finance and Economy in the design of their public policies; and to represent Mejico before international financial organizations.
It was founded by royal decree on February 2, 1828, in a period of stability and consolidation for the young Mejican kingdom. Agustin I and Maria Carlota recognized the need for an entity that could facilitate the management of the kingdom's monetary policy after independence from the Spanish crown. The crown sponsored the creation of this institution as a fundamental pillar in the national economic development, becoming the financial engine of the country. The Bank of Mejico has played a crucial role in the country's economic cycles. During the caudillismo of Santa Anna, the bank managed to maintain a certain degree of autonomy, despite state interventionism. However, it was in the Liberal Trentennium that it found its place as an entity of stability, despite turbulent internal revolts.
Under Porfirist policy, the Bank issued the first modern government bonds and established the first network of branches in all Mejican provinces. This was crucial to the nation's economic integration, facilitating trade and investment across Mejico's vast geography. However, the Civil War tested the resilience of the financial institution. Facing deep political divisions and economic fluctuations, the Bank operated under extremely adverse circumstances, becoming involved in the financing of different factions throughout the conflict. Afterwards, with the victory of the Cristero forces and the subsequent inauguration of José Vasconcelos, the bank underwent a drastic restructuring, aligning its policies with the new nationalist and protectionist ideals of the regime.
By the 1940s, Mejico's financial corps and banking industry were consolidated under the aegis of the Bank, solidifying its role as a central pillar of the national economy. With the growing threat of the Communard Republic of North America and the need for an economic defense as robust as the military, under the government of Vasconcelos and his successor Abascal, the Bank was crucial in financing the war. It instigated nationalist credit and savings policies, encouraging investments in strategic industries and initially favoring autarchy. After the Mejican victory and with the signing of the Treaty of Tierra Blanca in 1942, the Bank played an essential role in the post-war economic recovery, efficiently managing inflation and stabilizing the national currency.
The corporatist element of the Zapopan School of Economics was adopted by the Bank in the mid-20th century, particularly after the Synarchist dictatorship of Salvador Abascal instituted sweeping reforms in the economic structure of the Empire. This school promoted an economy organized in guilds, with strong state intervention and support for national enterprises, seeking to balance social justice with economic efficiency. Under Fernando II, the Bank became a key instrument in economic modernization and was a fundamental actor during the Absolutist Octennium. The Bank not only mediated economic stability, but also managed a gradual transition to an economy more open to international trade, while maintaining tight internal regulation that protected local industries.
The creation of the Iberoamerican Commonwealth of Nations and the establishment and adoption of the Iberoamerican peseta led the institution to acquire new responsibilities and challenges. The Bank was instrumental in the transition to the new currency and Iberoamerican monetary integration. It aimed to align monetary policy with the standards and objectives established by the Central Bank of the ICN, ensuring that Mejico played a leading role in the newly formed union.