In November 2006 Wal-Mart's Mexican subsidiary received approval to open a bank. The application faced little opposition in Mexico, unlike the company's failed effort to start a bank in the United States. This was partly because in Mexico, Wal-Mart's entry was generally regarded as increasing competition in a historically concentrated banking sector. With over three-quarters of all Mexicans unbanked, the authorities also looked to Wal-Mart to reach the underserved. Along with the promise, Wal-Mart's entry presents a transnational regulatory dilemma with implications beyond Wal-Mart and Mexico. Because it is Wal-Mart's only banking venture, the new institution will have its Mexican host as the sole supervisor. The corporate headquarters in the United States will remain unregulated at home and beyond Mexico's reach. This home-host hole is inevitable where supervisory harmonization proceeds against the background of regulatory diversity: the United States has a policy against combining banking and commerce; Mexico does not. The hole presents risks for Mexico; however, this article argues that patching the hole with more centralization at the international level may come at Mexico's expense.
Gelpern, Anna. “Wal-Mart Bank in Mexico: Money to the Masses and the Home-Host Hole.” Connecticut Law Review 39, no. 4 (May 2007): 1513-1538.