Mex­ico shocks in­vestors with bill to elim­i­nate bank fees

Winnipeg Free Press - - BUSINESS - ERIC MARTIN

EXICAN Pres­i­dent-elect An­dres Manuel Lopez Obrador and his al­lies are quickly show­ing they’ll put the peo­ple over busi­ness in­ter­ests — even if it risks jar­ring in­vestors.

The coun­try’s stocks, bonds and cur­rency plunged Thurs­day af­ter the Se­nate leader for Lopez Obrador’s Morena Party in­tro­duced a bill to elim­i­nate cer­tain bank fees and com­mis­sions.

While the move may be wel­come in parts of the coun­try, it came as a sur­prise to a busi­ness com­mu­nity reel­ing from the his de­ci­sion 11 days ago to scrap a US$13-bil­lion air­port project.

MThe politi­cian known as AMLO has al­ways some­what un­nerved in­vestors with his left­ist agenda, but the lat­est ac­tions by him and his party have left them wary of what comes next. Af­ter tak­ing smil­ing pho­to­graphs with ex­ec­u­tives in the first four months of his pres­i­den­tial tran­si­tion, Lopez Obrador in the past two weeks has chal­lenged them like no other leader in re­cent mem­ory.

The bank-fee move “is in line with the air­port mes­sage: There is a new pres­i­dent in town, and he is go­ing to make sure things change,” said Car­los Bravo Regi­dor, a po­lit­i­cal sci­en­tist at Mex­ico City’s Cen­tre for Re­search and Teach­ing in Eco­nom­ics. “Lopez Obrador is try­ing to re­store some de­gree of po­lit­i­cal au­ton­omy to the pres­i­dency vis-a-vis eco­nomic pow­ers.”

The bill in­tro­duced Thurs­day calls for the elim­i­na­tion of fees on ATM cash with­drawals and bal­ance re­quests, as well as com­mis­sions charged for print­ing bal­ances and trans­fers to other banks. Mex­ico’s bench­mark stocks in­dex fell 5.8 per cent, the big­gest one-day drop since 2011. Grupo Fi­nanciero Banorte SAB, the na­tion’s largest pub­liclytraded bank, led the losses with a 12 per cent tum­ble. The peso lost 1.6 per cent.

Ri­cardo Mon­real, the Se­nate leader for Lopez Obrador’s Morena party, told re­porters late Thurs­day that he won’t rush the ini­tia­tive through Se­nate com­mis­sions be­fore hear­ing all points of view on the is­sue. It could be changed, mod­i­fied or im­proved through de­bate, he said, while in­sist­ing the bank­ing fees charged to Mex­i­cans are too high.

“We don’t want to be clas­si­fied as a par­lia­men­tary group that’s against the econ­omy, against eco­nomic groups, against in­vestors,” he said.

While the elim­i­na­tion of fees jolted mar­kets, it would be good for the na­tion’s ci­ti­zens.

“Mex­i­can bank users were be­ing ripped off with those fees, with pre­vi­ous gov­ern­ments do­ing noth­ing to curb the ob­vi­ous abuse,” Bravo said.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.