By Amy Guthrie Of DOW JONES NEWSWIRES MEXICO CITY -(Dow Jones)- The world is better prepared than in 2008 to face the financial problems that a Greek exit from the European monetary union could create, former Mexican central banker Guillermo Ortiz said Wednesday. U.S. banks are far healthier than during the last financial crisis, from which financial authorities and executives learned much, said Ortiz, who is now chairman of Mexican bank Grupo Financiero Banorte-Ixe SAB (GFNORTE.MX). "I think that another Lehman situation--that a global institution of that size will go bankrupt--is unlikely to occur," Ortiz told reporters, while acknowledging that great uncertainty as to how the Greek situation will play out is likely to continue to inspire nervousness among investors. The 2008-09 global financial crisis triggered Mexico's deepest recession since the 1995 Tequila Crisis. The Mexican economy contracted 6% in 2009. Stanford-educated Ortiz led Mexico's central bank from 1998 through 2009. "The big fear now is that there will be a run on bank deposits [in Europe]. There has been a significant reduction of deposits in Greece, and [European] authorities are focused on avoiding large deposit withdrawals in periphery countries," he said. Spain's banks have seen an erosion of deposits in recent weeks, intensifying that country's financial crisis. Retail and corporate deposits in Spanish banks fell EUR31.44 billion ($39.31 billion) in April to EUR1.624 trillion, their lowest since the euro-zone debt crisis began in earnest, according to data published by the European Central Bank. The data for Spain have potential to show much worse deposit outflows for May, a month in which one of Spain's biggest banks, Bankia SA (BKIA.MC), has effectively collapsed under the weight of bad property loans. Two of Mexico's biggest banks are subsidiaries of Spanish financial groups, raising concerns that those banks' capital could be raided to meet tightening capital requirements in Spain. Together the Mexican units of Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC) and Banco Santander SA (STD, SAN.MC) hold 35% of the MXN2.87 trillion of deposits in the Mexican banking system. The chairman of BBVA assured this week during a visit to Mexico that his bank will not decapitalize its foreign subsidiaries, highlighting that in the case of Mexico, financial regulations place strict limits on bank loans to parent companies. Ortiz, who has in the past criticized the high level of foreign banks' market share in Mexico, focused instead Wednesday on the benefits that global banks have brought to the Mexican financial system. "Mexican banks are better managed today in large part because of the modernization that foreign banks have driven," Ortiz said, adding that the outflow of dividends to parent companies was an unintended consequence of permitting the entry of foreign banks. Currently Mexico is in a "privileged" economic position, Ortiz said, noting the country's growing competitiveness in export markets and well-defined monetary policy, which instills market players with greater confidence. Mexico's manufacturing-heavy economy ships around 80% of its exports to the U.S. This year the Mexican economy is widely expected to expand by 3.5%. -By Amy Guthrie, Dow Jones Newswires; (5255) 5980-5177, amy.guthrie@dowjones.com
