A house built on sand

The troubles of Mexico's bankers are only just beginning. In the months ahead their past mistakes will come under renewed scutiny in a major investigation demanded by the Mexican congress. Some bankers could lose their jobs, a few could wind up in jail, and their banks - still suffering the effects of the industry's near collapse following the 1995 peso crisis - will be put under new pressures.

With political point scoring a major factor in the investigation, predicting the final outcome is tough. The bleakest scripts involve a systemic collapse of the banking system and maybe renationalization of the banks.

For the first time in Mexico's modern history opposition politicians have the power of a congressional majority, and they are determined to use it. They want the bankers, civil servants and ministers who they judge acted unprofessionally, and in some cases fraudulently, before and after costly bank rescues, to be brought to account.

Their attacks on the banks, some of which have links to the ruling Partido Revolucionario Institucional (PRI), may be politically motivated, but the signs are that a searching inquiry will find plenty of genuine dirt.

The focus of attention is the Mexican bail-out vehicle, the Fondo Bancario de Protección al Ahorro (Fobaproa), which in the wake of the crisis took over the worst banks and recapitalized the better ones.