Mexico 1994-1995: The First Financial Crisis of the 21st Century

Thirty years ago, IMF Managing Director Michel Camdessus described Mexico’s financial crisis in 1994-1995 as “the first financial crisis of the 21st century.” Financial crises occurred in Mexico with disturbing regularity at the end of each six-year presidential term in 1976, 1982 and 1988. The presidential election year 1994 was no exception. But this crisis and the response were different. The study group will review the causes and contours of that Mexican financial crisis.

The Study Group will discuss:

1.   The origins of the 1994-1995 crisis

2.     The responses by the international community

3.     The responses by the Mexican authorities

4.     Spillovers from the Mexican crisis onto other countries

5.     Why this Mexican crisis was different

6.     The aftermath of the crisis

Edwin (Ted) M. Truman was a senior fellow at the Peterson Institute for International Economics (PIIE) from 2001 until December 31, 2020. Before joining PIIE, he was assistant secretary for international affairs at the U.S. Treasury from 1998 to January 2001. He returned to the Treasury as counsellor to the secretary from March 2009 to May 2009. Prior to his service at the Treasury, he was director of the division of international finance at the Board of Governors of the Federal Reserve System from June 1977 until October 1998. He joined the staff of the Federal Reserve in 1972 after teaching at Yale.

He received his PhD in economics from Yale in 1967 and his B.A. from Amherst College in 1963. As a senior fellow at M-BCBG, he continues his research on the international coordination of economic policies. His faculty sponsor is Robert Lawrence, Albert L. Williams Professor of International Trade and Investment, Harvard Kennedy School. Email: etruman@hks.harvard.edu