For most of 2008, as the global financial crisis deepened, it seemed as if Mexico would escape the worst of its consequences. Successive governments had taken significant steps to prevent a recurrence of the self-generated crises of the 1970s, 1980s and 1990s. The country’s external debt ratios were low, and neither private nor public sector were heavily dependent on credit. Mexico’s banks were conservatively run, most of the big ones in sound foreign hands, and had escaped the subprime mortgage debacle.

But in a few weeks in October, that illusion was shattered. Modest pressure on financial markets and the peso, as foreign institutions sold Mexican assets to hoard liquidity, quickly intensified. The reason, unseen by investors and regulators, was panic selling by Mexican companies left scrambling for dollars after derivative contracts went wrong.