http://www.arabnews.com/?page=6§ion=0&article=129155&d=6&m=12&y=2009&pix=business.jpg&category=Business
Sunday 6 December 2009 (19 Dhul Hijjah 1430)
Venezuela takes over three more small banks
Reuters
CARACAS: Venezuela said on Friday it was taking over three more small
private banks, raising the week's tally to 7, as part of a clean-up in the
financial sector that has investors worried, but is seen as unlikely to herald
a major wave of nationalizations.
Finance Minister Ali Rodriguez said the three institutions - Baninvest,
Central Banco Universal, and Banco Real, which account for just 2 percent of
Venezuela's banking deposits - would hopefully be "rehabilitated" by the state.
"The rest of the financial system is in good hands despite the criminal
campaigns going on," Rodriguez said, accusing opponents of socialist President
Hugo Chavez of trying to destabilize Venezuela through rumors of a bank crisis.
Most analysts believe the Chavez government is engaged in a "cleanup"
exercise of a minority of banks with funding or ownership irregularities,
rather than being on the brink of taking over another sector in the South
American nation.
Socialist Chavez, a harsh critic of the United States and Wall Street,
has nationalized large sectors of his OPEC nation's economy since coming to
power in 1999. So far, he has held back from large-scale seizures in the
banking sector.
"We are not facing a situation of crisis in the national bank system,
despite the enormous, deep crisis that has shaken the financial world, and
severely affected developed economies, particularly the United States,"
Rodriguez said in a TV speech. A first clutch of closures on Monday - of four
small banks accounting for 6 percent of deposits - worried depositors and
unsettled markets, with Venezuelan bonds plummeting and the bolivar currency
weakening in nonofficial trade.
Rodriguez did not specify the reasons for the new closures.
The four banks closed Monday had problems of solvency and unexplained
capital movements, the government said.
Venezuela's benchmark global bond traded 0.750 point, or 1.3 percent,
higher on the day, to bid 67.000, with a yield of 14.448 percent. Earlier, it
had hit a session high of 68.875 in a rally that quickly faded after
Rodriguez's announcement of the latest bank interventions.
So far this week, the bond has fallen over 10 percent.
Friday's announcement capped a tumultuous week for Venezuela's financial
system, in which Chavez twice said he would nationalize all private banks if
necessary, before softening his rhetoric on Thursday and Friday.
"The local bourgeoise are trying to create panic," Chavez said Friday in
the latest of many public speeches on the subject. "We are intervening with
wisdom."
Long lines have formed at some banks, as people check on their money or
move it to bigger institutions, and some workers from the closed institutions
have protested. But there is none of the wide-scale panic seen during
Venezuela's 2004 financial crisis when half the nation's banks went under.
Chavez said depositors from two of the institutions closed on Monday were
all recovering their funds, while the state would take over and reopen the
other two banks.
"We are not going to leave savers in the street."
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