Editing Bank of Mexico (section)

=== Porfiriato ===

In 1897, during the presidency of [[Porfirio Díaz]], Finance Minister [[José Yves Limantour]] helped to guide the passing of the ''Ley de Instituciones de Crédito'' (Law of Credit Institutions). The new law grouped banks into three categories: issuing banks, [[mortgage loan]] banks, and auxiliary development banks. Issuing banks were allowed to circulate banknotes within the state they were issued, but only the ''Banco Nacional de México'' and the ''Banco de Londres y Mexico'' notes were allowed to circulate nationally. They were also authorized to make short-term loans. Mortgage banks were authorized to make loans collateralized by [[real estate]] for periods up to 40 years. The auxiliary development banks were authorized to make loans for periods up to two years for the purpose of financing industrial endeavors such as mining, manufacturing, and agriculture. Nationwide, there were 24 banks with issuing authority, two mortgage banks, and five auxiliary development banks.<ref name=":2" /><ref name=":3" />

In 1908, Limantour issued new reforms to protect the Mexican economy from weaknesses exposed by the [[Panic of 1907|US financial crisis of 1907]]. These reforms prevented emissions banks from opening new branches and required them to convert themselves into auxiliary or mortgage banks. These changes had limited success, and though Limantour predicted a budget surplus for 1911, the collapse of the [[Porfiriato|Porfirian]] regime and the intensification of the [[Mexican Revolution|Revolution]] ground normal banking activity to a halt.<ref name=":2" />