Bank of Mexico Board Members Speak Out over Proposed Cash Law that Could Jeopardize Bank Autonomy
Posted on 12/11/2020
The Central Bank of Mexico (Banxico) warned against a draft law migrating through Mexico’s Congress. The central bank says the legislation could jeopardize its independence and could force it to handle the proceeds of drug cartels. Mexico President Andres Manuel Lopez Obrador’s party is MORENA and the party crafted the proposal. MORENA denies the bill will encourage money laundering. Part of the law includes enabling the Bank of Mexico to buy up cash that commercial banks cannot return to the financial system. The law is being pitched as a way to help Mexican migrants pass on cash. Banks can get in major trouble for handling cash of illicit origin.
The law must still pass the lower house of Congress.
“The draft law would oblige the central bank to carry out high-risk operations that could compromise the availability of the international reserves and the fulfillment of its constitutional mandate,” the bank said.