Liquidity Management in Latin America: Change and Opportunity

By Gilles Roger, Regional Head of Liquidity and Investments in Latin America, HSBC

Two commercially-important countries in Latin America – Mexico and Argentina – have recently announced various significant regulatory changes. Gilles Roger, Regional Head of Liquidity and Investments in Latin America, at HSBC explains how these changes are in both cases potential opportunities for treasuries to enhance their liquidity management.

Mexico: Centralized Operational Account

Mexico has recently introduced an important regulatory requirement for the country’s public sector banking arrangements that will take effect during 2018. Major public entities in Mexico, such as health and infrastructure construction, receive an annual program assignment together with associated budget. Previously all the sub-entities (such as provincial sub-entities) beneath each major entity would all open their own individual physical bank accounts. From 2018, this will change and only the major entities will hold physical accounts for treasury management. Sub-entities will be assigned ‘registration’ accounts, which are similar in some respects to virtual accounts.

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