Post by anenro on Sept 5, 2019 15:48:24 GMT 4
Some Mexican Regulators Carry Their Resignation Letters at All Times
Mexico’s banking and securities regulator has already been hobbled by hundreds of resignations after the country’s new president slashed salaries and benefits. Now, one of his prospective laws threatens to set off an exodus of the agency’s top officials.
The legislature is set this month to enact strict curbs on the revolving door between the government and private sector, seeking to eradicate what leftist President Andres Manuel Lopez Obrador calls the “cancer of corruption.” High-level public servants would be banned from taking jobs with companies they once regulated for 10 years — one of the most stringent such laws in the world.
For a financial regulator that often sees officials take jobs with banks — far too routinely, for its many detractors — and has been criticized for its cozy relationships, the idea of such limits hasn’t gone over well. Many high-level workers have spoken of quitting the agency, known as CNBV, if the law takes effect, according to interviews with a dozen current and former employees. Some have gone so far as to carry resignation letters in their pockets to submit as soon as the bill is approved.
A brain drain at the CNBV could further weaken an institution that oversees everything from bank liquidity ratios to initial public offerings in Latin America’s second-biggest economy. More broadly, it underscores the challenges for Lopez Obrador as he tries to fulfill his vision of rooting out misconduct and ending an era where officials engineered new private fortunes with government favors.
“It would be devastating to the regulator,” said Mauricio Basila, a former CNBV official who oversaw the stock market and now runs his own consulting firm. “The best people would leave rather than stay.”
Work Slowdown
AMLO, as the president is known, has already made sweeping payroll cuts since the start of his administration late last year as part of an austerity push. That’s led to a wave of departures at government entities from the finance ministry to state-owned oil company Pemex.
At the CNBV, about one-fifth of the employees have left since last year, people with knowledge of the matter said. As a result, the pace of banking audits, the drafting of new regulations and approvals for licenses have all slowed as less-experienced workers took over posts, said the people, who asked not to be named because of the sensitive nature of the matter.
Another wave of resignations could erode the CNBV’s ability to ensure the stability of the banking system, as well as prevent frauds, cyberattacks and money-laundering schemes, the people said. It could also delay technological innovation.
Ivan Aleman, a former CNBV official who previously oversaw money-laundering prevention and now runs a consultancy, said weaker oversight would sow more risk-taking across the financial system.
Mexico’s banking and securities regulator has already been hobbled by hundreds of resignations after the country’s new president slashed salaries and benefits. Now, one of his prospective laws threatens to set off an exodus of the agency’s top officials.
The legislature is set this month to enact strict curbs on the revolving door between the government and private sector, seeking to eradicate what leftist President Andres Manuel Lopez Obrador calls the “cancer of corruption.” High-level public servants would be banned from taking jobs with companies they once regulated for 10 years — one of the most stringent such laws in the world.
For a financial regulator that often sees officials take jobs with banks — far too routinely, for its many detractors — and has been criticized for its cozy relationships, the idea of such limits hasn’t gone over well. Many high-level workers have spoken of quitting the agency, known as CNBV, if the law takes effect, according to interviews with a dozen current and former employees. Some have gone so far as to carry resignation letters in their pockets to submit as soon as the bill is approved.
A brain drain at the CNBV could further weaken an institution that oversees everything from bank liquidity ratios to initial public offerings in Latin America’s second-biggest economy. More broadly, it underscores the challenges for Lopez Obrador as he tries to fulfill his vision of rooting out misconduct and ending an era where officials engineered new private fortunes with government favors.
“It would be devastating to the regulator,” said Mauricio Basila, a former CNBV official who oversaw the stock market and now runs his own consulting firm. “The best people would leave rather than stay.”
Work Slowdown
AMLO, as the president is known, has already made sweeping payroll cuts since the start of his administration late last year as part of an austerity push. That’s led to a wave of departures at government entities from the finance ministry to state-owned oil company Pemex.
At the CNBV, about one-fifth of the employees have left since last year, people with knowledge of the matter said. As a result, the pace of banking audits, the drafting of new regulations and approvals for licenses have all slowed as less-experienced workers took over posts, said the people, who asked not to be named because of the sensitive nature of the matter.
Another wave of resignations could erode the CNBV’s ability to ensure the stability of the banking system, as well as prevent frauds, cyberattacks and money-laundering schemes, the people said. It could also delay technological innovation.
Ivan Aleman, a former CNBV official who previously oversaw money-laundering prevention and now runs a consultancy, said weaker oversight would sow more risk-taking across the financial system.