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What: Shares of Argentine bank Grupo Financiero Galicia
So what: The fall in the bank's stock today likely has a lot to do with new government regulations tied to foreign exchange. With high inflation driving increasing demand for dollars, Argentina's government passed new regulations today that it hopes will cut down on tax evasion and money laundering as well as capital flight. The new regulations will require that orders to purchase foreign currency be approved based on cross-checks with the customer's wealth and income. This follows on the heels of other regulations last week that required -- among other things -- oil and mining companies to repatriate export sales and insurance companies to bring offshore investments home.
Now what: How much will this hurt Grupo Financiero Galicia? Will it hurt the bank at all? This remains to be seen. But what is for sure, is that Argentina's government is getting increasingly hands-on with the banking system to address the country's financial ills. If, over the long run, the actions end up making the Argentine economy healthier, that'll be a good thing for the banks. Sometimes, though, when political considerations are in the mix, the growth and profitability of the companies affected are less of a concern for the government.
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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.