Some time ago, my attention was called to the fact that more than 70% of the income received by one the main credit institutions - i.e. banks - in Mexico came from interests paid by the Mexican Government caused by Fobaproa, now IPAB. This explains not only the presence of foreign investors in the Mexican banking system, but also the significant profit they get, which comes from taxpayers´ pockets. In a nutshell, this is a simple explanation. True business for banks does not lay in granting credit or financing to account holders and customers all over the country - as it should be - but in the interests received from the Government that arise from the debt acquired by IPAB.

This is undoubtedly regrettable, because the main premise and essential function of banks is precisely to grant credits and finance development. Banks keep increasing their income through payments received from Government that come from our taxes; they also increase the already high costs they charge to financing applicants.

There is a real irony, if a bank decided not to grant any credits to its customers, it would still have a profit due to the payments received from the Government for IPAB interests. This, again, explains the interest foreign investors have in Mexican banks; it would be naïve to think that they are interested in contributing to our country´s development.

On the other hand, it is an open secret that banks have disappointed people by refusing to grant credits to individuals and small and medium companies, which are the ones that require support and fresh capital the most, in addition to being a majority.

Nowadays, large financial groups, such as Citigroup, the Spaniard bank Santander Central Hispano S.A. and HSBC Holdings, hold 85% of bank assets in Mexico; as a matter of fact, it is the highest share of foreign control in all of Latin America. Whether good or bad, this is the reality.

My concern is not in whose hands Mexican banks are, but if the purposes for which banks were created are being met, and mainly if the rescue funds provided by the Government to keep on operating meant to benefit account holders and savers are being justified. It is clear enough to me that both scenarios appeared catastrophic. Declaring any Mexican bank bankrupt would have meant to strangle - and even more, ending with the dreams of - Mexican savers.

During the banks´ rescue in 1995, the main purpose, far from protecting account holders´ savings, was to keep banks operating and financing Mexico´s development; there was even a regulating reform, which President Salinas de Gortari determinedly tried to protect; it was precisely to prevent leaving Mexican payments system in the hands of domestic investors. However, President Zedillo- in virtue of the circumstances and the December ´94 crisis- was forced to abolish and enact a reform stating that foreign investors were allowed to own more than 51% of financial institutions shares. This caused what is happening now and I mentioned in the paragraph above: 85% of banks´ assets are in the hands of foreign investors.

I do not mean to criticize said circumstances with these data, but the role these foreign global institutions are playing and therefore the way they are contributing to Mexico´s development. Unfortunately, there are three main financial groups that own the banking market, henceforth producing an oligopoly that has not benefited at all the small and medium companies in Mexico which are usually not only the largest number but also the ones in more need of financing.

The Congress is reviewing once again the banks´ rescue made in 1995, when Mexican citizens paid with their taxes a debt of around US$20 Billion. In that year banks were still in the hands of Mexican investors. However, everybody knows who was benefited with the banks´ rescue; actually, not long ago a list - black list - of the beneficiaries of said rescue was published, I can assure that most of them were businessmen, owners of the capital and not precisely the most vulnerable ones, the middle class, the sector that needed it the most. On the other hand, our congressmen are trying to recover public funds delivered to institutions to cover losses from loans that, in a second assessment, should not have been part of the rescue, in addition to the audits that have been attempted on some financial institutions.

This gives something to think about: Do we want to attract direct foreign investment or return to the times, like in the seventies, when former President Luis Echeverria, made everything possible to limit the participation of foreign investors in Mexico? I think this other extreme would be harmful to Mexico, as it was in the seventies and eighties.

As everything in life, I think every comment or constructive criticism must be made including also feasible proposals and/or suggestions that look for the country´s benefit. I think there must be a reform and better regulation not only in, for example, fees charged by banks that are usually very high, but also to reduce the cost of bank loans, making them more competitive and providing an incentive to financial institutions to increase the amount of credits granted to customers. Unfortunately, banks, instead of granting credits to companies that could foster economic development, have obtained very different benefits, by charging high fees for the services they provide, such as credit cards use, to mention only one example.

Citigroup has invested in Mexico 15% of its global investment, but receives from Mexico 30% of its profit, and not precisely from granting credits as it should be. It is clear enough to me, lack of credit is a serious obstacle for economic growth in Mexico and bank practices must be regulated, watching that banks provide high quality services that are not only advantageous for the institutions. Banking is a key and strategic segment for Mexico´s development and banks must therefore provide services in favor and for the benefit of the country. A few years ago I read one of the greatest paradoxes in life: Banks require from credit applicants to prove they do not need the credit or that they are financially sound to repay.

Something that makes no sense, because if it were so, no one would need to apply for a credit. In Mexico this is common, hopefully it will change soon for the good of Mexico.