Mexico Should End Outdated Central Banker Limits, Former Finance Ministry Official SaysBy
Nation should modify Banxico age, birthplace requirements
Governor Carstens announced Thursday plans to leave next year
Mexico’s government should use the departure of Governor Agustin Carstens as an opportunity to eliminate antiquated laws for central bank board members that limit candidates based on age and birthplace, according to a former top Finance Ministry official.
The nation should do away with the requirement that members of Banco de Mexico’s five-person rate-setting board be 65 or younger at the time that they start their term and allow Mexicans born abroad to serve, said Ernesto Revilla, the ministry’s former chief economist who now works at Citibanamex. Such a measure would probably enjoy broad support in Congress because it doesn’t benefit any one political party, Revilla said.
As Mexico looks for a replacement for Carstens, who on Thursday announced his resignation effective in July, the law prohibits experienced Mexican policy makers like Angel Gurria and Guillermo Ortiz from replacing him because they’re in their later 60s. Alejandro Werner, the western hemisphere head at the International Monetary Fund, would likewise be prohibited from being chosen because he was born in Argentina, Revilla said. Revilla contrasted Mexico’s rules with those of the U.K., where Canadian Mark Carney took over the helm of the Bank of England in 2013.
"The rules are totally outdated," Revilla said in a phone interview from Mexico City. "This comes from a time when Mexico was much more nationalistic and life expectancy was lower. In the current environment, we need to look for the best person regardless of age or place of birth."
Carstens plans to step down next year to run the Bank for International Settlements, leaving Mexico without its best-known policy maker amid new economic challenges from Donald Trump’s administration. His departure, just as the outlook for U.S. and Mexico joint trade policies sour, may increase volatility in the peso. The central bank raised its key interest rate a half point last month to 5.25 percent, the highest since 2009, after the election of Trump, who Carstens once likened to a "hurricane," dragged the currency to a record low.