Application Fobaproa In late 1994, triggered the most serious economic crisis of the contemporary Mexican history. The crisis caused interest rates to soar, causing the overhang of businesses and families to the banks and the cessation of payments by debtors. Bridgeton landfill will undoubtedly add to your understanding. A possible bankruptcy of the banks would have no access to cr and savers would not have to dispose of their deposits, which have collapsed in productive infrastructure. A system with this risk becomes unreliable, resulting in a panic that leads to more capital flight as companies unable to meet obligations, which further exacerbates the economic crisis. Faced with this danger, the Federal Government Fobaproa applied to absorb the debts to the banks, capitalize the financial system and ensure savers’ money. Fobaproa liabilities amounted to 552,000 million dollars in bad loans by promissory notes that traded at the Bank of Mexico.This amount equals 40 of GDP in 1997, two thirds of the Expenditure Budget for 1998 and double the domestic public debt. While operations culminated Fobaproa to absorb the bad loans to banks, in January 1995 the federal government created the Temporary Capitalization Program (PROCAPTE), an alternative tool to clean up the financial system with faster access and higher volume foreign capital and restore the solvency of banks. Additionally, the administration of Ernesto Zedillo proposed bank debtors restructure their debts through investment units (IDUs). According to the rules themselves Fobaproa, acquisition of debt by the Trust will be made provided that the shareholders of cr institutions inject fresh resources.As a result of the 1994-1995 crisis, many companies were unable to pay its debts, so to restructure them in 1996 was created theCoordination Unit for the Business Banking Agreement (UCAB), which operated with fiscal resources request of the Ministry of Finance and Public Cr. Consistent with data from the unit itself, the Ucab served as collateral for the bank bailout and benefited 54 companies amounting to 9,700 million dollars.