Exclusive: Mexico banking watchdog boosts oversight of banks after Trump win
- Donald Trump Sworn in as 45th U.S. President
- Wall Street ends higher as Trump becomes president
- Walgreens Boots Alliance (WBA) Said to Face Antitrust Concern for Rite Aid (RAD) Fix - Bloomberg
- Bristol-Myers Squibb (BMY) Says It Won't Pursue Accelerated U.S. Regulatory Pathway for Opdivo Plus Yervoy in Lung Cancer
- Apple (AAPL) Sues Qualcomm (QCOM) Over Patent Royalties in Antitrust Case - Bloomberg
U.S. President-elect Donald Trump (C) answers questions as his wife Melania Trump and Senate Majority Leader Mitch McConnell (R-KY) watch on Capitol Hill in Washington, U.S., November 10, 2016. REUTERS/Joshua Roberts
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
By Roberto Aguilar, Noe Torres and Alexandra Alper
MEXICO CITY (Reuters) - Mexican banking regulators have begun extraordinary daily checks on the health of banks and brokerages since Donald Trump clinched the U.S. presidential election, four people familiar with the matter said.
The checks are focused on the capital and liquidity levels at the financial institutions, three sources said, adding that regulators were particularly interested in banks' holdings of Mexican government peso-bonds.
Yields on Mexico's ten-year benchmark fixed rate bonds have risen over 100 basis points since the election, their highest since 2011, on concern that Trump could rework or scrap the North American Free Trade Agreement (NAFTA) and worries that his stimulus policies could mean higher U.S. interest rates.
Two of the sources said that information on derivatives positions was being sought in some cases.
Three sources said their institutions had received one or two calls per day from Mexico's CNBV banking watchdog since Trump won.
All the sources spoke on condition of anonymity because they were not authorized to speak to the media.
Mexico's banking regulator spokeswoman Priscila Blasco said "we are monitoring all the banks ... We are not officially asking for anything additional."
Several analysts consulted by Reuters after Trump's victory said Mexico's banking sector is well capitalized and stable.
Mexico's peso last week took its biggest two-day tumble in more than 20 years following the surprise win for Trump, who has vowed to rework NAFTA and said he will make Mexico pay for a wall on the U.S. Southern border.
Mexico's financial sector was the second hardest hit in the IPC index <.MXX> last week, slumping more than 8 percent after Trump's win.
Before the U.S. election, Mexico's financial authorities ordered the country's banks to conduct stress tests to assess the potential macroeconomic impact and volatility resulting from a Trump victory, in addition to a normal annual stress test..
Jaime Gonzalez, CNBV President, said in an interview earlier this month that the results revealed four or five banks needed to boost their capital buffers but declined to name them, adding that the gap was not serious.
The new oversight is in addition to the pre-election tests.
Mexican banks and brokerages usually report monthly capital ratios while banks alone report Liquidity Coverage Ratios, according to the CNBV.
(Additional reporting by Christine Murray and Natalie Schachar; Editing by Bernard Orr)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Trump to target Obama's climate initiatives: White House website
- Four more survivors extracted from Italian hotel hit by avalanche
- Gambia's leader Jammeh says he will step down, ending political impasse
Create E-mail Alert Related CategoriesReuters
Related EntitiesDonald J. Trump
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!