The nexus between business groups and banks: Mexico, 1932–1982.

Over the twentieth century, the Mexican financial system emerged embedded in business groups, as a way of serving their financial needs. Until 1982, Mexico's banking system experienced unprecedented expansion. This article explains how, despite extensive insider lending practices, the relationships between business groups and financial intermediaries were sound enough to sustain them: first, because the commercial banks developed a certain autonomy from their related business groups; and second, because counterbalanced decision-making occurred when property was shared by two or more business groups. However, the ownership of banks remained concentrated in the hands of the business groups. [ABSTRACT FROM PUBLISHER]