Venezuela Nationalizes Two banks, Investigates Others 4 bank Law Infractions #Of_VenezuelaFebruary 11, 2019
All together, the four banks, which make up the Bolivar Financial Group, serve almost 750,000 depositors and encompass less than 10% of the financial market.
The government’s Deposit Guarantee and Banking Protection Fund (FOGADE) will secure more than 95% of the deposits.
In accordance with the General Law on Banks and Other Financial Institutions, FOGADE will guarantee up to 10,000 bolivars (US $4,650) to each depositor in an initial phase, and will announce further guarantees once the banks’ assets are re-evaluated.
President Chavez encouraged depositors in the nationalized and liquidated banks to open new accounts in the Bank of Venezuela, which the government purchased from the Spanish Santander group in May.
Re-Orienting Public Banking
The recent interventions in the banks are part of the government’s plan to strengthen and re-orient the public financial sector to give further impetus to national production, including food and energy production as well as manufacturing.
Chavez said the government would also intervene in the administration of a series of food production and distribution companies that held significant deposits in the Bolivar Financial Group.
Private Bankers say Measures Are “Appropriate and Necessary”
In a joint statement released on Wednesday, two major private banking associations, the National Banking Council and the Banking Association of Venezuela, said the government’s measures are “appropriate and necessary” and that the financial system as a whole is in good shape.
“We believe that these measures will contribute in a positive way to guaranteeing that the Venezuelan financial sector as a whole, which is characterized by health and prudent administration, will not be affected by any situation related to the measures adopted by the executive,” the statement continued.