Next window please: Foreign banks are shifting operations, employees to Miami & Montevideo.
“In Puerto Maderero and Recoleta these days, the executive suits are everywhere. Suddenly, we are seeing more limos and formally-dressed men entering and leaving meetings in cafes and luxury hotels,” says Argentine daily Clarin.
And while these meetings between wealthy Argentines with investments abroad and their financial advisors used to take place in local offices, new Argentine Central Bank regulations are forcing 14 foreign banks to reconsider their BA presence.
In addition to limiting consumer choice and stifling competition, the measures offer a glimpse of what could happen in the U.S. if the federal government succeeds in creating what the Wall Street Journal calls a new “Super Regulator.”
The measure in question, A4981/09, began changing the rules of the game for foreign banks providing wealth management services to clients in BuenosAires. In essence, it makes it more difficult for these banks to take new deposits locally and invest them abroad. If they maintained a physical presence with local branches, these foreign banks would only be able to offer financial advisory services to clients who had previously shifted their funds abroad.
The subsequent decision by several banks including Wells Fargo, HSBC, Merrill Lynch and Credit Suisse to move employees and operations to Miami and Montevideo should not, however, be viewed as a defeat or even a retreat. On the contrary, videoconferencing and Internet-enabled money transfers will allow the banks equal or better interaction with their clientes bonaerenses, hence a happy ending: creativity and technology trump bloated bureaucracy every time. (Full Story)
