MEXICO CITY: Mexican President Andres Manuel Lopez Obrador said on Thursday (Mar 7) that the government respects the work of ratings agencies and will not limit their purview, after a senator in his party pitched a bill to increase oversight of the agencies.
In recent weeks, credit ratings agencies Standard & Poor's and Fitch sent out a series of warnings about Mexican sovereign debt, oil firm Pemex and dozens of corporations, expressing concerns about the government's plans to bail out the deeply indebted state oil company.
The pressure from the ratings agencies has caused discomfort among government allies, and Lopez Obrador has said they were not taking into account huge savings he estimates will flow into public coffers thanks to a corruption clampdown.
Senator Salomon Jara, the spokesman of Lopez Obrador's Morena party in the Senate, on Thursday announced a bill that would give Mexico's banking and securities regulator CNBV greater authority to regulate the agencies.
Jara questioned the reputation of the agencies, pointing out their failure to foresee the 2008 global financial crisis, and saying they had not been loud enough in their criticism of the rising debt load in Pemex under previous administrations.
Fitch and S&P did not immediately respond to requests for comment.
However, or Thursday, Lopez Obrador stressed that the government would "not limit the work" of the agencies.
"We are open to scrutiny in politics and economics," he said. "We will always be respectful of the opinion of the ratings agencies."
Morena Senate Leader Ricardo Monreal said on local radio that the bill was Jara's personal initiative, and would not be presented in Congress by the party.
Jara insisted that he would proceed on his own, saying in an interview that he would make his proposal next week, perhaps on Tuesday.
"We are proposing that the (CNBV) have greater powers to issue the revocation (of the firms' licenses)," said Jara. "You have to regulate them."
The senator's proposal would reform article 340 of the Securities Market Law, which allows the CNBV to revoke the rating agencies' authorization to operate in the country.
A source in Morena told Reuters top senators from the party were meeting on Thursday to determine how to proceed.
Controlled by allies of Lopez Obrador, congress has floated several bills that have alarmed investors.
In mid-February, Morena presented an initiative to set maximum drug prices. Late last year, a proposal to regulate bank fees hit local markets.