Mexico shocks investors with bill to eliminate bank fees
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.