Mexican regulator takes over running of banks hit by US fentanyl sanctions
MEXICO CITY, June 26 (Reuters) - Mexico's banking regulator will temporarily step in to replace the administration of two banks sanctioned by the U.S. for alleged involvement in money laundering linked to organized crime, it said on Thursday.
The nation's banking and securities commission said it will intervene in the operations of CIBanco and Intercam Banco to protect the banks' creditors and depositors.
The move comes a day after the U.S. Treasury prohibited certain transactions with the banks, as well as brokerage firm Vector Casa de Bolsa, under new fentanyl sanctions. All three firms deny the allegations.
The sanctions effectively cut the institutions off from the U.S. financial system and could have a significant impact on Mexican banking, given the interconnectedness between lenders and close trade ties with the U.S., experts said.
CIBanco in a statement said it will collaborate with U.S. and Mexican regulators and that clients' deposits were protected under local law.
Intercam Banco did not immediately respond to requests for comment.
Mexico has so far rebuffed the allegations from the U.S., saying the Treasury has not provided Mexico with proof to back up their declaring these institutions "as primary money laundering concerns."
"There is no evidence," Mexican President Claudia Sheinbaum told reporters earlier on Thursday. "We will collaborate and coordinate (with U.S. authorities), but we will not bend to them."
Mexican authorities, as well as the nation's banking association, have said that the blow to the firms would not have a contagion effect on the broader financial system, which remained resilient.
Intercam's assets stand around $4 billion, while CIBanco holds some $7 billion and Vector nearly $11 billion, according to the U.S. Treasury, making them medium-size operations in the country.
Vector's CEO, Edgardo Cantu, told Reuters on Thursday that the institution had not been subpoenaed by U.S. authorities and that it was "fully prepared to provide the information needed to clarify these allegations."
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