Moody's: Mexico banks' view raised to stable

Moody's Investors Service said in a new report that Mexican banks have strengthened their capital and reserve positions, along with their ability to generate solid earnings even at the height of the global economic crisis.

This has led to a change in outlook on the Mexican banking system to stable from negative, Moody's said.

The stable outlook also considers the system's sound funding and liquidity, the agency said, and improving asset quality.

Partly offsetting these positive factors are the challenges that Mexican banks face as they remain reluctant to lend in the wake of the crisis, which could stifle their growth, Moody's said.

The good news is that Moody's said it sees no signs of asset bubbles that could pose a long-term risk to the banks' asset quality.

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