Venezuela passes banking control law
CARACAS: Venezuela’s National Assembly has passed a banking reform law that boosts government control and depositors’ insurance, and reopens next week three of eight banks that were shuttered in recent weeks for inspection.
The law, passed yesterday, increases government-backed depositors’ insurance to $13,800 dollars from $4,600. “We’re guaranteeing 98 per cent of depositors who were saving with the banks that were intervened, that is to say Canarias and Banpro,” congressman Rafic Souki was quoted as saying by the official ABN news agency.
The banking reform coincides with leftist President Hugo Chavez’ drive to revamp national finances, with an eye on legislative elections next year, observers said. Chavez has closed eight banks in recent weeks, four of which were integrated into a new bank called Bicentenario.
Prosecutors also issued 30 arrest warrants and 15 travel bans to bankers. Three of the shuttered banks will be allowed to reopen on December 21.
The country’s official journal recently identified them as the privately-owned Bolivar Banco, Banco Confederado and Central Banco Universal.
The bank seizures signaled that the Chavez government was still pushing ahead with its socialist finance system — which was boosted with the purchase of the Banco de Venezuela from the Spanish Santander group earlier this year.
The moves caused a dip in Venezuelan bonds and the country’s currency in free trading, and prompted fears investors would move to withdraw funds, sparking a sector-wide liquidity crisis.
