Mary Anastasia O’Grady points out an interesting issue coming down the pike: our government now owns a third of Citibank, which in turn owns Mexico’s 2nd largest bank (Banamex), and Mexico has a law against foreign government ownership of its banks.
This blog is called voluntaryXchange for a reason: when both parties enter into transactions voluntarily, things don’t get f***ed up as much.
In this case … let’s see … the only thing the Mexicans volunteered to do is enforce their own laws.
Banamex itself, as a subsidiary, wasn’t in a position to make a voluntary choice.
It’s possible, that Citigroup entered into the entirety of its new relationship with the government voluntarily. This seems unlikely though, given the heavy-handed “choices” presented to CEO’s of other major banks.
Realistically, this means that we have one party that entered into the transaction voluntarily, and three that were herded into or innocent bystanders.
So … add violation of other country’s laws to the list of negative externalities and unintended consequences of our government’s approach to the financial crisis.
FWIW: would it really be that hard for the feds to have a database of who owns what and why it makes a difference before they blunder into another tempest?
citigroup, banamex, mexico, foreign, ownership
