Mexico bank reform draft boosts authority over struggling banks
MEXICO CITY, April 22
MEXICO CITY, April 22 (Reuters) - Mexican authorities could force asset sales and suspend bonuses at struggling banks in a bid to boost financial stability under a provision of a proposed banking reform obtained by Reuters.
The measure is part of a wider reform aimed at boosting credit and easing legal pressures on banks in Latin America's second biggest economy that is slated to be presented by centrist President Enrique Pena Nieto on Tuesday.
The proposed powers take a page from rules included in the United States' banking overhaul known as the Dodd-Frank law that followed the 2007-2009 U.S. financial crisis.
That law included a provision to claw back banker pay, in response to public anger that executives at Wall Street firms such as AIG were still being paid large salaries and bonuses despite mistakes that fueled the crisis.
Mexico's proposal would grant authorities the power to force a bank to suspend bonuses to the general director and officials up to two levels below him.
It would also allow for the forced sale of assets, suspension of dividend payouts to shareholders, and even allow for the removal of staff members at the institution.
Mexican banks, however, are highly capitalized nearly 20 years after the so-called 1994-1995 Tequila crisis, when the banking sector collapsed.
- U.S. war veteran released by North Korea returns home |
- South Korea expands air defense zone to partially overlap China's |
- Dynasty's Congress party punished in Indian state elections
- Pennsylvania newlyweds "just wanted to murder someone together:" police
- South Korea to make announcement on air zone; expansion is anticipated |