Proposed Mexican financial legislation sparks concerns

Significance

The move, however, has proven controversial, generating a backlash over its potential impact on commercial banks and the central bank (Banxico), which sees it as a threat to its autonomy. The proposals come amid an unusual surge in remittances flowing into the country.

Impacts

• Any legal change that is seen as affecting Banxico’s autonomy would damage investor confidence significantly.
• AMLO may stop legislation changes if they cause a depreciation of the peso.
• Mexico’s economy looks set to become far more reliant on remittance income than it has been in past years.