Mexico’s finance minister attended President Claudia Sheinbaum’s Friday morning press conference to speak about the government’s administrative takeover of three Mexican financial institutions that the United States government this week accused of laundering millions of dollars for drug cartels.
During her Q&A session with reporters, Sheinbaum made the argument that the U.S. government shouldn’t just focus on Mexico in the fight against narcotics, but address issues in its own backyard as well.
The money of CIBanco and Intercam account holders is ‘absolutely’ safe, says finance minister
Early in the press conference, Finance Minister Edgar Amador Zamora spoke about the decision of the National Banking and Securities Commission (CNBV) to decree “temporary managerial interventions” at the Mexican banks CIBanco and Intercam and the Mexican brokerage firm Vector.
The move came after the United States Department of the Treasury accused the three financial institutions of laundering millions of dollars for drug cartels involved in the trafficking of fentanyl and other narcotics to the U.S.
Due to the money laundering concerns, the Treasury Department’s Financial Crimes Enforcement Network prohibited certain transactions between U.S. banks and CIBanco, Intercam and Vector, all of which denied the accusations against them.
Amador said that after the close of financial markets on Wednesday, “it was found that the lines of financing for these three entities had problems.”
“With the aim of avoiding this situation and in a preventive way, the Ministry of Finance and Public Credit, the Bank of Mexico, the Institute for the Protection of Bank Savings and the National Banking and Securities Commission decided to carry out a temporary intervention in the management of these institutions,” he said.
The aim, Amador clarified, was to “ensure there were no interruptions in the banking system and to look after, in a preventive way as well, the savings of the clients of these institutions.”
“The Mexican banking system hasn’t experienced any interruption, it’s operating normally and it remains one of the strongest internationally,” the finance minister said.
“… The exchange rate has remained stable, in a range between 18.85 [pesos to the US dollar] and 18.95,” he added.
Amador said that the managerial interventions at the three financial institutions “provide certainty to savers and investors.”
Later in the press conference, a reporter asked the finance minister what it means to have “problems in the lines of financing.”
“Banks, like any business, also need lines of financing. There were some problems in the lines of financing for these financial institutions,” Amador said without going into further detail.
The three financial institutions’ capacity to access credit was presumably diminished as a result of the United States’ government accusing them of money laundering. On Friday, S&P Global lowered CIBanco’s credit rating.
Amador said that CIBanco, Intercam and Vector together hold less than 1% of “deposits in the banking system” in Mexico.
Nevertheless, “we didn’t want to take risks,” he said.
“The important thing is to protect savers, protect the integrity of the financial system,” Amador said.
Asked whether the money of account holders is safe, the finance minister responded, “Absolutely.”
Mexican government takes control of two Mexican banks facing US sanctions
Asked how long the managerial interventions would last, Amador responded:
“It’s a temporary intervention, only managerial, … to ensure that all liquidity conditions function normally. And we’re going to be assessing [the situation] and at the time it is considered appropriate to restore the original conditions, we’ll do so. But there is not a defined period.”
Amador said there would be no additional temporary government takeovers of Mexican financial institutions.
“They’re the only ones. And [this is] very important: It’s a very small scale,” he said before reiterating that CIBanco, Intercam and Vector hold less than 1% of deposits in Mexico.
Sheinbaum: ‘The issue is that the greatest demand for drugs is in the United States’
A reporter asked the president whether she considered the United States “measures” against CIBanco, Intercam and Vector — including the ban on U.S. banks completing transactions with them — were “fair.”
“For example,” the reporter continued, “United States banks that confessed in recent years that they have links to money laundering only received reprimands or fines from the United States government.”
Sheinbaum — who on Thursday said that the Treasury Department hadn’t provided any proof that CIBanco, Intercam and Vector were involved in money laundering — said that her government has raised the issue of fairness with relation to sanctions with the U.S. government.
“There is this idea that that problem of drug trafficking is an issue for Mexico,” she added.
“Of course we have to attend to what corresponds to us, and we are doing that, but the issue is that the greatest demand for drugs is in the United States,” Sheinbaum said.
She said that the United States shouldn’t just respond to the drug problem “with security measures” (such as by deploying troops to the U.S.-Mexico border), but also by “attending to young people and the people who have addictions.”
The United States needs to stop “more people from turning to drugs,” Sheinbaum said.
“… Drugs are sold on the other side [of the border]. Where is fentanyl sold? In the United States, in the cities of the United States,” she said.
The United States “also has the obligation to investigate and the obligation to stop the … weapons that come to Mexico from the United States. … It’s a reciprocal issue. It’s not just about the Department of the Treasury investigating banks in Mexico, but also about what’s happening there, what’s happening in the United States, and they are obliged to investigate,” Sheinbaum said.
By Mexico News Daily chief staff writer Peter Davies ([email protected])
