Mexican president: More competition needed in banking sector

Mexico’s president said Friday that the key to bringing down bank commissions is to ensure that the financial institutions face sufficient competition.

“Banks (lower their fees) due to other banks, competition ... when there’s no competition, there are abuses,” Andres Manuel Lopez Obrador , leader of the left-leaning National Regeneration Movement (Morena) party, said at his daily press conference at the National Palace in Mexico City.

On Friday, Lopez Obrador will participate in the closing ceremony of Mexican banking association ABM’s 82nd banking convention, a gathering of industry leaders that is being held in the Pacific resort city of Acapulco.

Lopez Obrador said prior to that event that it will serve as an opportunity to encourage banks to support the country’s growth.

On Nov. 8, 2018, shortly before Lopez Obrador took office, two Morena lawmakers caused share prices on the Mexican stock exchange to plummet when they unexpectedly introduced a bill to reduce bank commissions.

The then-president-elect, however, restored calm to the markets when he said a day later that he would not support the bill and also pledged not to make any changes to banks’ legal framework for three years, or the halfway point of his administration.

On Friday, Lopez Obrador insisted on the need for competition in the banking sector.

“Rather than regulating, there needs to be more competition, less (industry) concentration ... In other words, there shouldn’t be monopolies, there should be a free market and real competition,” he said.

The president also called for bringing down fees charged on remittances and said there is a need for more financial inclusion, lamenting that many municipal seats do not have bank branches.

Separately, Lopez Obrador announced that a preliminary agreement had been reached with teachers affiliated with the militant CNTE union, who in recent days had barred entry to the lower house of Congress in Mexico City to demand the definitive cancelation of a 2013 public education overhaul signed into law by Lopez Obrador’s predecessor, Enrique Peña Nieto.

“An initial agreement was reached yesterday (Thursday). The issue hasn’t been resolved because, based on what I’ve been told, they’re going to have consultations with their rank-and-file, the teachers,” he said.

Nevertheless, he characterized as positive a meeting between members of his administration and the union and vowed to revoke the overhaul, which, among other things, made hiring, continued employment and promotions contingent upon educators’ performance in compulsory evaluations.

CNTE members, who are concentrated in Mexico’s poorest states, saw Peña Nieto’s overhaul as an attempt to make them scapegoats for the shortcomings of chronically underfunded schools.