Mexican stocks headed for 2nd day of losses

MEXICO CITY – Mexican stocks appeared headed for a second day of losses Friday after the party of President-elect Andres Manuel Lopez Obrador floated a proposal to prohibit some commissions charged by private banks.

Mexico’s benchmark IPC index was down about 0.45 per cent in late trading Friday, after dropping 5.8 per cent in the previous session.

The Mexican peso has dropped about 2.3 against the U.S. dollar since Wednesday’s close.

Mexico’s Banco Base attributed the setbacks in financial markets to the Senate proposal, which would prohibit charging minimum-balance, electronic transfer and other fees.

Senators from Lopez Obrador’s Morena party said the measure was necessary because Mexican banks get one-third of their income from fees, a higher amount than in other Latin American markets.

But in an apparent damage-control effort, Lopez Obrador’s financial governance team said Thursday that the bill would be subject to further study so its impact could be determined.

Lopez Obrador takes office on Dec. 1 after winning a crushing victory in presidential elections by pledging to put the poor first and respect private business.

In a news conference Friday, Lopez Obrador said the executive branch wasn’t planning any changes to banking rules, but the legislature had the right to decide for itself.

“There is nervousness and mistrust,” Lopez Obrador said of financial markets. “This is part of what democracy and freedom means.”

Carlos Urzua, Lopez Obrador’s pick to head the treasury department, said in a statement that senators were well-intentioned but needed to pay attention to potential effects on financial markets.

“Even though we recognize that their intention is to improve the lives of Mexicans,” Urzua said, “that goal is not necessarily going to be achieved if they don’t take into account the impact on public finances, and the stability of the financial sector.”