The Legend of Saint Agustín

This year, the NADBank Summit welcomes a keynote speaker whose career reads like a chronicle of every major economic crisis of the past four decades — and who, more often than not, was already standing where he was needed. Agustín Carstens, former General Manager of the Bank for International Settlements and former Governor of the Bank of Mexico, has spent his life listening for alarms that others could not hear. Before he takes the stage, it is worth telling the story of how the legend of "Saint Agustín" came to be. 

 

The Legend of Saint Agustín 

Growing up in Mexico City, I learned that two things were both certain and unpredictable: earthquakes and economic crises. With earthquakes, just before they start, you at least get the warning of a loud alarm that tells you what is coming. 

The 2008 global crisis felt like that proverbial alarm was already sounding, and yet Mexico was not collapsing. Sure, it felt the shock of the crisis, but not in the way many expected. 

So how was Mexico, against all odds, faring better than anticipated? Who was keeping catastrophe at bay? 

One name was repeated over and over. Agustín Carstens. 

If legend is to be believed, he was gifted with something close to foresight: the ability to see into the future and to make money appear out of nowhere. How else would you explain Mexico's sovereign massive oil hedge, executed ahead of the crisis, which protected public finances and generated more than $10 billion dollars in profit during the direst of times? That is how the Legend of Saint Agustín was born. 

For many Mexicans born in the 2000s, these stories were a first introduction to economics, which contrasted sharply with Agustín's first dealings in the matter. 

When he was eight years old, his father dropped him off at school with just enough money for his bus ride home. After school, he tried getting on the bus, but the fare had surged and he had to walk back home. When he finally arrived, he asked his mother what had happened. She explained inflation. That was his introduction to economics. 

His career would later give him a front-row seat to crises. Rising through the ranks of the Bank of Mexico, he became Treasurer at just 33 years old and later Head of Economic Research. He lived through the Tequila Crisis and the Russian default crisis directly, as well as their aftermath, which made him a crisis expert.  

He went on to serve as Executive Director at the International Monetary Fund and later as Deputy Managing Director, building a reputation as one of the world's leading crisis experts. But before the next global shock arrived, he left Washington. In 2006, he returned to Mexico as Finance Minister. What may have seemed like a detour in his career turned out to be impeccable timing—for Mexico, at least. 

He bore the brunt of the 2008 crisis as finance minister of Secretary of Finance and Public Credit, as it is called in Mexico; he became a steady presence.  His calm demeanor, attributed to his past as a baseball pitcher, became a staple and source of reassurance for Mexican people. The sentiment was “If Agustín is calm, we are calm.”  
After the worst of the crisis, he was appointed Governor of the Bank of Mexico. In that role, he defended the peso during the tumultuous period that included the European sovereign debt crisis, China's economic slowdown, and the collapse in oil prices. Along the way, he defended the independence of the Bank of Mexico and was considered again for the Managing Director of the IMF role.  

Then came the unexpected turn. He woke up in the middle of the night with a call from the forces that be, the man behind the curtain, the Basel Club. Offering him a chance to go behind the curtain and move the strings. He had to decide then and there whether to take the red pill or the blue pill. Or so legend has it. 

He was named general manager of the Bank for International Settlements (BIS), the Central bank of Central banks; he was the first Mexican and the first leader from emerging markets to be appointed to this post. Arguably the most prestigious job in economics.  

While this was a big break for Carstens, the announcement created uncertainty at home. The peso weakened, and investors questioned who would replace him. Analysts described him as an "anchor" of economic credibility for Mexico, and uncertainty seemed to be sailing away.  

As market volatility continued and concerns about Mexico's outlook grew, Carstens and the government reconsidered the timing. Instead of departing in July, he agreed to remain in office until November. An understated but telling gesture, he went on record acknowledging that announcing his early departure had created unnecessary uncertainty, which solidified his legend as a saint, humble and respectable. Our Saint was too big to protect Mexico alone; he needed to protect the global economy.  

During the pandemic, he helped coordinate central Bankers to act in concert rather than independently, and the BIS played a strong role in resolving the liquidity crisis and the subsequent solvency crisis.  

He also brought visibility to an institution that had long operated quietly in the background. Though clear and relatable communication, he compared cryptocurrencies to the alchemical process of creating gold and offered innovative takes on blockchain and the modernization of central banks.  

Under his leadership, innovation became central to the BIS agenda. The BIS Innovation Hub emerged as a platform for exploring new financial technologies. 

And so, the legend of Saint Agustín persists. 

Not because he could predict the future, though at times it seemed that way. Not because he could make money appear out of nowhere, although Mexico's oil hedge proved remarkably well timed. The truth is less mystical and perhaps more compelling: while others treated economic crises as rare and unpredictable disasters, for more than four decades, Agustín Carstens made a career out of listening for alarms that nobody else could hear. And when the shaking finally began, whether in Mexico City, Washington, D.C. or Basel, Switzerland he was usually already standing where he was most needed.