"The CBPM and Its Role in Shaping the National Banking Sector"

Many small banking companies were founded in Mexico during the first decade of the twentieth century. One of these companies was the Compañía Bancaria de París y México (CBPM), which was founded in 1909. Although CBPM performed credit operations with the general public and also lent money to federal and local governments, CBPM was also used by shareholders to finance their own companies, in keeping with the then-common practice of insider lending. This practice continued in Mexico well into the twentieth century. Using the case of the CBPM, the author analyzes the long-term effects of banking companies and practices like this on the construction of the heavily-concentrated Mexican industrial organization structure, as well as on the conformation of a solid and unbiased banking sector in the country.