Background on the Institutions Involved
CIBanco, Intercam, and Vector are three small-scale Mexican financial institutions that have recently encountered funding challenges. These banks were flagged by the US Department of Treasury for alleged money laundering activities.
Who are CIBanco, Intercam, and Vector?
CIBanco, Intercam, and Vector are Mexican banks with limited operations compared to larger financial institutions in the country. CIBanco was established in 1988, Intercam in 2003, and Vector in 2005. All three have been operating under the supervision of Mexico’s National Banking and Securities Commission (CNBV).
Government Response to Allegations
Edgar Amador Zamora, the Secretary of Finance and Public Credit (SHCP), addressed the concerns raised by the US Department of Treasury. He clarified that these three banks faced funding issues, but they only account for a negligible portion (<1%) of the total bank deposits in Mexico.
Amador Zamora emphasized that the intervention was a preventive measure to ensure no disruptions and safeguard customers’ savings. He assured the public that depositors’ funds were secure and that no major risks were taken.
No Systemic Impact on Mexican Banking Sector
When asked if more banks might be implicated in money laundering, Amador Zamora maintained that the Mexican banking system continued to operate normally without any interruptions. He stressed that the SHCP had not received concrete evidence supporting the allegations against these specific institutions.
The Mexican government clarifies that there is no systemic risk to the banking sector following the US Treasury’s allegations against CIBanco, Intercam, and Vector. https://twitter.com/hashtag/Mexico?src=hash&ref_src=twsrc%5Esearch%20twgr
— Secretaría de Hacienda (@Despacho_SHCP) March 18, 2020
Intervention Details
The CNBV’s Board of Governors announced a temporary intervention to replace the administrative bodies and legal representatives of CIBanco, Intercam, and Vector. This action aimed to protect depositors’ rights and customers of these institutions, considering the potential implications from the US Treasury’s announced measures.
Key Questions and Answers
- Q: What prompted the intervention? A: The US Department of Treasury’s allegations of money laundering against CIBanco, Intercam, and Vector.
- Q: How significant are these banks in the Mexican banking sector? A: They represent a minor portion (<1%) of the total bank deposits in Mexico.
- Q: Are depositors’ funds secure? A: Yes, according to the SHCP, depositors’ funds are safe and secure.
- Q: Has the Mexican banking sector experienced any disruptions? A: No, according to Amador Zamora, the Mexican banking system continues to operate normally.
- Q: What is the purpose of the temporary intervention? A: To safeguard depositors’ rights and ensure the integrity of the financial system in light of potential US measures.
