Well, just fine

So… HSBC has ponied up 379,000,000 pesos to the CNBV (Comisión Nacional Bancaria y de Valores, the Mexican bank regulatory agency), or 27.5 million U.S. dollars, which is about half the bank’s  yearly profits.  Fine by me.

This photo is from Spain, but the sentiments are pretty much universal.

Big banks here, like elsewhere, have generally managed to get politicians to write the regulations the way they want them.  Typically, they seek to privatize gains and socialize losses, great and small.  When I first moved the Mexico, the bankers were in a pissing match with the Federal District, over local regulations meant to minimize the chances of bank robbery… you know, things like bullet-proof glass in the windows and protection around the teller’s windows.  The bankers found it extremely unfair that they had to pay for those renovations.  Of course, you know who (hint… his initials were AMLO) had a field day, sticking up for the protection of Mexico City cops (who the banks expected to guard them for free) against the guys we all love to hate.

I think we’re a bit out in front of the U.S. on this — in theory, Mexican banking regulations are some of the toughest in the world, but in this instance, HSBC just swallowed hard and paid up when CNBV, which apparently had begun investigations before this scandal was known in the United States.

Guillermo Babatz, president of the banking commission, said:

…  in the past HSBC had appealed fines that regulators had levied in the courts. It was unclear whether the Wednesday announcement marked a change in that policy.

The banking commission president said details of the scandal first emerged in the US Senate committee report because Mexico’s “extremely restrictive” legal framework doesn’t allow regulators to announce investigations or fines until all appeals are exhausted.

He said banks in Mexico had used intensive lobbying to get favorable regulatory rules, and said those rules should be changed because they favor financial institutions and put regulators at a disadvantage.