Mexican President Andrés Manuel López Obrador is in support of big banks that want to expand in Mexico.
According to The Wall Street Journal, Mexico’s leader meets regularly with bank chiefs and has championed less-stringent regulation on financial institutions, which he believes can police themselves. In addition, he was recently able to broker a compromise on a proposal from his own political party that would have eliminated many retail banking fees —and cost banks hundreds of millions of dollars in revenue.
The new regulation will allow banks to keep charging most fees, as long as they expand services to the country’s middle class, as well as offer additional access to digital financial products.
“If there are many banks, there will be competition, and bankers will have to offer better services to clients, which will make costs and commissions go down,” López Obrador said at a banking-industry conference in March.
López Obrador believes that banks can not only help him fight corruption, but also boost his country’s economy. The Mexican president “has an innate tendency to think that the market is up to no good,” said Alberto Ramos, chief Latin America economist for Goldman Sachs Group. “But as time goes by and he learns more about different industries, he has softened a bit and become more pragmatic.”
In the meantime, Banco Bilbao Vizcaya Argentaria, Banco Santander and Citigroup have all pledged to invest more than $3 billion in Mexico. Banks are also getting set to launch a new “intermediate account” for middle-class citizens, which will include higher limits on deposits without fees. The central bank is creating rules for these accounts.
“We all participated, and decided the best path was more competition, more inclusion,” said Luis Niño de Rivera, the new president of the Mexican Banking Association and a board member at Mexico’s Banco Azteca.