He also stated that Mexico’s Central Bank acted in order to protect the strength of the peso through the auctioning of dollars. Although this measure cannot fully counteract the market’s tendency, it can help to ameliorate its effect on the country.

Elizondo described the crisis as a “Black Swan”, a reference to a book by Nassim Nicolas Taleb’s on the impact of the highly improbable. According to Taleb’s book, in order to be characterized as a “Black Swan”, an event must possess three attributes. 

“First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable,” says Taleb.

Elizondo praised the bailout packages approved by various governments and central banks around the world, but said that their effect would not be immediate. The global markets have continued to decline because of diminished expectations for short-term economic growth or recession and because the financial system takes time to assimilate, digest and put into the effect the measures taken by the governments. The process of economic recovery and the return of trust in the financial system will take time to complete.   

One of the main points Elizondo got across during his one-and-a-half hour presentation was that the Mexican peso has not been weakened by the economic downturn. Yes, the dollar has become more expensive than the peso, but that is a result of millions of investors consolidating their savings into U.S. Treasury Bonds to protect themselves from the crisis. The steep rise in demand for the dollar is what caused the peso to appear weaker in comparison.