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#54433 at 2021-02-08 17:18:47 (UTC+1)
QR Midnight Riders #252: Twitter Bans Gateway Pundit, your [their] next Target Edition

Banxico Plans to Finance Banks That Can't Dispose of Dollars

Mexico's central bank is set to announce Monday that it will lend money to local banks that can't find U.S. financial institutions to take their stashes of bulk cash in dollars, according to a draft of a statement seen by Bloomberg News.

The pledge to help Mexican banks is part of a raft of new measures to be announced by finance officials to help migrants access banking services and get better exchange rates for dollars they bring home. "Banco de Mexico will provide facilities to credit institutions that have difficulty repatriating dollars in cash, through guaranteed contingent financing, under the terms and conditions determined by the central bank," according to the draft statement, which did not provide further details. The central bank declined to comment on the new measures. As the statement is still in draft form, final details could change. Finance officials are set to present the plan as an alternate solution to a bill passed by Mexico's Senate that would force the central bank to purchase dollars from local lenders who cant find correspondent banks in the U.S. that want to work with them. The central bank argued the measure could force it to take dollars of dubious origin and open it up to money laundering sanctions from U.S. authorities.

Billionaire Ricardo Salinas, the owner of Banco Azteca, was the only top banker to publicly back the bill by arguing that Mexican banks had some of the strictest controls in the world. Global lenders operating in Mexico have opposed the bill, which hasn't been approved by the lower house. Central Bank Governor Alejandro Diaz de Leon, Finance Minister Arturo Herrera and Luis Nino, head of the Mexican banking association and the chairman of the board of Banco Azteca are set to announce the new measures later on Monday. The plan also includes using President Andres Manuel Lopez Obrador's Banco de Bienestar, or Wellbeing Bank, to help migrants open Mexico accounts from the U.S., as well as other measures so they can change dollars at a better rate.

The Banco de Bienestar declined a request for comment.
https://www.bloomberg.com/news/articles/2021-02-08/banxico-plans-to-finance-banks-that-can-t-dispose-of-dollars

#46465 at 2021-01-21 15:08:41 (UTC+1)
QR Midnight Riders #214: Markings of a Perfect Storm…Not Of Our Doing Edition

Mexican Billionaire Loses to Central Bank in Battle Over Cash

A battle between one of Mexico's richest men and one of its most respected institutions appears to have ended in a victory for the central bank.

President Andres Manuel Lopez Obrador came out on Wednesday against a bill that would have forced the monetary authority to buy greenbacks that lenders can't otherwise sell, effectively killing its chances of passing the Senate in its current form. Critics said the measure would have exposed the central bank to money laundering allegations by compelling it to buy dollars of dubious origin. Its most prominent proponent was billionaire Ricardo Salinas Pliego, the owner of Banco Azteca and an ally of the president.

The development no doubt comes as a relief to global lenders including Citigroup Inc. and Banco Santander SA, who had spoken out against the measure during debates last month, warning of profound implications for Mexican financial institutions and the country's reputation as a safe place to do business. Investors have been paying attention as well. The debate weighed on the peso last month until the currency rallied when the lower house delayed its vote.

Lopez Obrador, speaking at his morning press conference Wednesday, said lawmakers needed to find a different solution that wouldn't risk conflict with international financial organizations.

"Lopez Obrador had to choose between maintaining the autonomy and the soundness of the central bank against solving a very specific problem of a certain group," said Marco Oviedo, the chief economist for Latin America at Barclays Plc. "Fortunately he chose to keep macro-stability versus special interest."

The root of the problem for independent Mexican banks are U.S. concerns about illegal drug profits making their way into the financial system. After HSBC Holdings Plc admitted to shipping billions to the U.S. under lax oversight and laundering $881 million from traffickers last decade, authorities on both sides of the border cracked down.

The fallout reduced the number of U.S. banks willing to accept bulk cash shipments from Mexican lenders, leaving those that aren't part of a global bank stuck with piles of dollars they can't turn into pesos.

Lawmakers from Lopez Obrador's Morena party said their bill was designed to help migrants who bring home U.S. banknotes to aid their friends and family. The inability of banks to offload the cash was forcing migrants to turn to small-time money changers with abusive rates, the lawmakers said.

Legislators could still find another mechanism to help banks unload dollars, such as compelling one of the country's development banks to be a buyer of last resort. But it seems the bill in its current form is dead, according to Carlos Serrano, the chief economist at BBVA Mexico.

"There is a very significant problem of lack of access to the financial system for families of migrants, but there's no problem with cash," he said.

Less than 1% of Mexico's $40 billion in annual remittances comes via cash, BBVA Mexico said in a Dec. 15 report. Out of $4.7 billion in U.S. cash taken in by Mexican banks in the first nine months of 2020, only 2% couldn't be sold to other clients or shipped to the U.S., according to a letter the central bank sent to senators.

Central bank Governor Alejandro Diaz de Leon spoke publicly against the bill, saying the problem of excess dollars was really one bank's issue and not systemic. Other opponents, including an independent senator and a deputy central bank governor, said the bill appeared to be designed mostly for the benefit of Salinas Pliego and Banco Azteca. Lawmakers in favor of the measure have denied that claim.

A spokesman for Banco Azteca said the bank played no role in writing the legislation, and declined to comment on Lopez Obrador's remarks Wednesday.

But last month, Salinas Pliego published a blog post in support of the proposal, making him the only major banker in the country to publicly back the bill. Salinas wrote that Mexican banks are required to comply with "one of the strictest" sets of anti-money laundering regulations in the world. The rules mean that "the dollars that enter the Mexican banking system, by definition, have a legal origin," so there is no risk for the central bank to take them, he said.

Salinas Pliego also controls the country's No. 2 television network, TV Azteca, as well as cable TV, energy and security companies. With a fortune of around $13.9 billion, he is the country's third-richest man, according to the Bloomberg Billionaires Index.
https://www.bnnbloomberg.ca/mexican-billionaire-loses-to-central-bank-in-battle-over-cash-1.1551736

#19194 at 2020-12-06 20:33:39 (UTC+1)
QR Midnight Riders #87: Placeholders Active Edition

Banks Pledge to Back Banxico (Mex. Central Bank) Against Forced Dollar Purchases

Mexico's major banks on Friday told the country's central bank they would support its efforts to fight a proposal in the Senate that would force the Banco de Mexico to buy cash that policymakers fear may be tainted with drug proceeds, people familiar with the talks said.

Central bank Governor Alejandro Diaz de Leon spoke with top executives from banks including BBVA Mexico, Citibanamex and Santander in a private virtual meeting about the unexpected bill, the people said. The central bank, known as Banxico, and lenders in the meeting didn't immediately respond to electronic requests for comment on Sunday.

The legislation would force Banxico to buy up foreign currency from local banks if they can't find another bank to take them.

Fewer and fewer major banks want to handle U.S. cash deposits due to strict anti-money laundering regulations and limits on deposits from people and companies. Once banks end up with big vaults of dollar deposits, they can no longer find institutions prepared to buy them back. The number of U.S. banks willing to take bulk cash shipments withered during the last decade in the wake of money laundering scandals at HSBC and Wachovia. It's not much of a problem for global banks operating in Mexico, but it crimps business for local lenders.

Ricardo Monreal, the Senate leader of President Andres Manuel Lopez Obrador's Morena party, introduced the bill late last month. The Morena senator who leads the finance committee, Alejandro Armenta, said lawmakers would incorporate input from the central bank, but he said the bill would probably get a vote this week in the Senate, where Morena has a majority with its allies, and then head to the lower house. At Friday's meeting, representatives of the country's bank association ABM discussed putting out a press release supporting Banxico's stance. So far, the group has remained silent on the bill and a representative didn't immediately respond to a request for comment.
https://www.bnnbloomberg.ca/banks-pledge-to-back-banxico-against-forced-dollar-purchases-1.1532627
funny dey are worried about it now as it never stopped them in the past.