Fobaproa: what is it and who did it rescue the mechanism that López Obrador promises not to repeat

Today the President of Mexico, Andrés Manuel López Obrador, mentioned the word Fobaproa and explained that in “times of crisis, greed and hunger to steal are more stimulated”, in addition to refusing to defer payments or any support that may arise in the face of the coronavirus crisis.

The so-called Savings Protection Bank Fund (Fobaproa) was created in the country in 1990, with the aim of having a “mattress” of money in case of facing an economic crisis.

In 1994 was the worst financial crisis and one of the most serious in the country’s history. All the credits requested by citizens to buy a house, a car, among others, became unpayable and a national affectation of families and businesses was unleashed.

About USD 400 billion was lost in reserves and very large loans were requested from the International Monetary Fund, to cover debts abroad.

Therefore, the country’s government decided activate the Fobaproa, with which it was possible to buy debts from banks and guarantee the savings of thousands of people.

During the administration of Ernesto Zedillo Ponce de León (1994-2000), it was guaranteed that the bank rescue would be transformed into public debt.

The measure generated controversy among specialists, since there are those who say that it served a great deal, since it supported hundreds of account holders, in addition to that without the rescue of the Fobaproa, dozens of people would have lost their assets and the banks would have gone bankrupt.

Others disapproved of the decision and considered that the government supported banking institutions by buying financial junk as bad loans.

“The Fobrapoa was not only the rescue, but what was stolen so-called businessmen and public officials. A support measure is designed and we do not agree AMLO said this morning during his conference.

He added that “by influentialism was paid much more”, And gave as an example the rescue of the Autopista del Sol.

“The highway was rescued when Fobaproa, some entrepreneurs had it, an appraisal was made and an amount had to be paid, that was the ransom, the appraisal was not respected and much more was paid for influentialism and all that went to the belly of the fobaproa. All of that later became public debt. ”

The president also called the decision a “corruption regime.” “I don’t speak to trial and error I always have proof and I know how they behave in times of crisis. In times of crisis they are encouraged to be greedy, they are hungrier to steal, We are not going to allow it, and I am having a hard time putting things in order because many already understood that these are other times and that the above was bad for Mexico. ”

We must remember that the country is currently going through two crises, one of them is the economic one, therefore, the banks announced that They will support their clients in order to bear the effects that the coronavirus pandemic will leave on families.

The Association of Banks of Mexico (ABM) revealed that it will give said help to customers and will freeze credit for up to six months, as the case may be, but only to all those who are current.

The ABM highlighted through a statement, what are the measures and the date it will take in account to enforce the proposal.

“These measures will apply to borrowers who were current on their payments as of February 28 of the current year, in the following types of credits: home construction, mortgage, automotive, personal, payroll, credit cards and microcredit, as well as commercial credits to companies and individuals with business activities, including agricultural credits ”.