US sanctions trigger financial crisis for Mexican banks
- The U.S. Treasury imposed sanctions on three Mexican banks due to alleged money laundering for drug cartels.
- In response to the sanctions, Fitch Ratings downgraded the banks, indicating increased financial vulnerability.
- The sanctions have led to significant operational disruptions for the affected banks, highlighting serious implications for Mexico's financial stability.
In Mexico City, the U.S. Treasury Department announced sanctions against three Mexican financial institutions on June 25, 2025, claiming they were involved in laundering money for drug cartels. This decision resulted in significant economic fallout, as CIBanco and Intercam Banco, along with the brokering firm Vector Casa de Bolsa, faced immediate repercussions. Shortly after the sanctions were announced, Fitch Ratings downgraded these banks, issuing concerns regarding their anti-money laundering standards and the impending negative impact on their financial stability. Mexico’s banking authority intervened by temporarily taking control of CIBanco and Intercam Banco to safeguard creditors, a move supported by President Claudia Sheinbaum, who emphasized the government’s role in protecting depositor interests. Nevertheless, as the sanctions commenced, Visa Inc. abruptly ceased all international transaction services for CIBanco, violating the 21-day grace period provided by the Treasury announcement. This has exacerbated the financial strain on the banks and their clientele, culminating in further ratings downgrades by S&P Ratings and growing fears over the ability of these institutions to maintain financial obligations. The combination of federal sanctions and the resulting banking turmoil is expected to create long-lasting impacts on the Mexican financial landscape.