During the first phase of development stabilization, which stretched from 1958 to the early 70s, the country experienced significant progress in its financial development, which was due to the price stability achieved with the anchoring of the exchange rate and regulated deposit rates, which guaranteed savers a moderate real return. The ratio of bank deposits to GDP doubled from 25 per cent to 50 per cent; And bank lending grew at the same pace, with a stable share of bank assets averaging 63%. With the reserves of the statutory reserve, the Bank of Mexico invested in government bonds and granted direct loans to the federal government. Something similar was imminent in Mexico around 1884, but in a famous court case held in the country`s capital, the position that favored free competition from commercial banks in terms of issuing banknotes triumphed. (Bank of Mexico). Quepons Álvarez, Adolfo (1973) The legal reserve and other control measures used by the central bank. Thesis. UNAM. Mexico, Federal District. The central bank used reserve resources to regulate international reserves, finance the government, and lend to financial intermediaries, mainly through development funds (Sánchez-Lugo 1976). Even the Bank of Mexico was able to increase the legal reserve on bank liabilities to 100% (Petriciolio, 1976).

ARTICLE 22 The obligation to build up reserves for each of the foreign currencies may be determined vaguely in United States dollars or in any other currency held by the banking companies in cash or in deposits with the Bank of Mexico, either in their current account or in a “special currency reserve account”. Ii. Legal reserve for the monetary policy instrument that obliges financial intermediaries to hold at the central bank a percentage of all deposits withdrawn by the public in any form or instrument and in bank assets, whether in national or foreign currency in accordance with the provisions of this Law. This obligation may be extended to other passive, conditional or service transactions determined by the Board of Directors of the Bank of Mexico. This law defines the legal reserve in three components: the minimum or fixed that replaces the deposits of monetary regulation; marginal minimum reserves of a flexible nature, established taking into account monetary and fiscal policies, and reserve requirements for bank assets. The balance sheet of the increase in the legal reserve proved that after the end of the war and for many years, Mexico resorted to the manipulation of minimum reserves, not only for the purposes of monetary regulation, but also for two other purposes: as a method of financing public deficits and for the purposes of “selective credit control”. In 1949, when there was again a worrying inflow of foreign currency, the banking law was reformed and the central bank was given the power to increase the reserve requirements of commercial banks to 100% of the growth of their liabilities. However, this obligation has been classified according to how institutions have integrated their loan portfolios, or in other words, according to how they have channelled their financing to different sectors of the economy. During the period from 1954 to 1970, known as stabilizing development, real output grew much faster than population, allowing both per capita income and real wages to rise continuously. The financial sector, in particular, has made tremendous progress. All of this is largely the result of the Bank of Mexico`s application of a prudent monetary policy, which has helped to ensure price stability similar to that of the United States over the same period. As a result, a fixed exchange rate (12.50 to the dollar) could be maintained even under an unrestricted exchange rate freedom regime, and the foreign exchange reserve showed an upward trend throughout the period.

ARTICLE 33 In the event of early cancellation of instruments with a duration of more than 360 days, an increase in the legal reserve equal to the reserve ratio for foreign currency deposits at recognition, increased by four (4) percentage points, shall be fixed for a period corresponding to the period elapsed between the date of commencement of operations and the date of early cancellation. ARTICLE 29 Foreign currency funds used to deposit the technical reserve shall not be used to build up minimum reserves. I. The daily position of Legal Fit; II. The daily results of the clearing house; III. Daily availability at the Bank of Mexico to cover minimum reserves; IV. participation in the interbank market in relation to total liabilities; V. Investments in Central Bank securities; VI. The conduct of deposits; VII. Compliance with the liquidity ratio; and VIII. Analysis of sources and use of funds.

VIII. Reserve funds, which cover minimum reserves and can be constituted either in cash in bank cash or in deposits with the central bank. The Bank of Mexico will determine the remuneration. Recurring reserve surpluses are not remunerated, even if they are part of the resources available to the central bank. ARTICLE 31 For the purpose of determining the minimum reserve requirement maintained by foreign currency bonds, they shall be converted into United States dollars in accordance with the equivalences published by the Bank of Mexico in accordance with the above-mentioned legal norm on the last working day of the calendar month immediately preceding.