U.S. Treasury Department officials from two key offices involved in the fight against fentanyl and its financing traveled to Mexico last week. The objective was to meet with counterparts from the Mexican government and representatives from the US financial sector. U.S. and Mexico to deepen collaboration against illicit finance.

This visit came after Treasury Secretary Janet Yellen visited Mexico in December 2023. During her visit, Yellen expressed the Treasury Department’s commitment to “use all the tools at its disposal to dismantle the ability of drug traffickers to sell this poison in our country.”

On 8 February, officials from the Financial Crimes Network (FinCEN) of the Department of the Treasury chaired a panel discussion on illicit finance jointly with the Financial Intelligence Unit (FIU) of the Government of Mexico and the Banking, Securities and Savings Unit (UBVA), Mexico’s banking and securities regulatory authority.

During this public-private dialogue, issues related to cross-border financial crimes, such as laundering of proceeds derived from trafficking in fentanyl precursors, trafficking in persons, fraud and corruption perpetrated by transnational criminal organisations, were addressed.

The panel also focused on the role of money-laundering organizations in concealing the proceeds of such illicit activities. Participants included financial institutions, financial intelligence units, regulators, and law enforcement agencies from both the United States and Mexico.

On February 9, the Office for Combating the Financing of Terrorism and Financial Crimes of the Department of the Treasury, in collaboration with the Ministry of Finance and Public Credit of Mexico, convened the nineteenth Bilateral Working Group on Public and Private Banking.

The objective was to bring together financial institutions, policymakers, regulators and supervisors from both countries to advance bilateral strategic priorities in the fight against illicit financing.

K. Tovar

Source: Bancaynegocios

(Reference image: Kenny Eliason at Unsplash)

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At a session of the US Senate held on Wednesday, senior executives of the country’s major banks warned about the possible adverse consequences of increased regulation of the sector, particularly in relation to the implementation of the Basel III rules proposed by the Federal Reserve.

Basel III represents an internationally agreed package of measures developed by the Basel Committee on Banking Supervision in response to the 2007-2009 financial crisis. The aim is to strengthen regulation, supervision and risk management in the banking sector.

Although the adaptation of Basel III to the US financial sector is still pending, several executives of major banks expressed concern in the Senate about the Federal Reserve’s proposal, which imposes stricter capital requirements.

Jamie Dimon, Chairman and CEO of JPMorgan Chase, warned that the proposal could “unjustified and unnecessary” increase the capital requirements of large U.S. banks by a range of 20 % to 25 %. Dimon noted that this would limit the ability of financial institutions to deploy capital at critical times, having a detrimental effect on the global economy, markets and businesses.

David Solomon, chief executive of Goldman Sachs, went even further by stating that the US proposal contradicts the essence of the Basel III Endgame rules, which are designed to set international capital standards without increasing the total amount. According to Solomon, the US proposal is “significantly stricter than any other jurisdiction” and would increase capital requirements by about 25 %.

Solomon cited statements by the Chairman of the Federal Reserve, Jerome Powell, and the Chairman of the Supervisory Board of the European Central Bank, Andrea Enria, to back up his arguments, noting that with the US rules, the requirements would be considerably higher for Europe’s systematically the largest banks, known as “G-SIBs.”

The executive also stressed that adopting this new regulation would result in an increase in credit costs for individuals and companies, exerting a negative impact on the country’s economy.

K. Tovar

Source: Telemundo

(Reference image source: Unsplash+)

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