Chavez threatens to take over more Venezuela banks
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CARACAS, Venezuela - CARACAS, Venezuela (AP) — President Hugo Chavez warned bankers Wednesday that he is prepared to take over all of Venezuela's private banks if necessary, saying the government will not allow violations of regulations designed to protect depositors.
"If I'm forced to intervene in all the private banks, I'll do it," Chavez said.
Chavez's administration took over management of four small banks Nov. 20, charging irregularities in their operations. This week, authorities closed the banks and said two, Canarias and ProVivienda (BanPro), will be permanently shut and their assets auctioned off.
Authorities say the banks were closed because investors were unable to show the origins of funds used to buy the banks.
Chavez sought to reassure Venezuelans that their money is safe, promising that the government will guarantee deposits.
"Nobody should be alarmed," he said in a televised speech.
Last week, the Central Bank lowered the percentage of deposits that banks are required to deposit with it to 23 percent from 25 percent in order to increase the amount of cash in circulation. Executives at private banks said that change was a response to an increase in withdrawals of funds by customers amid reports of the bank closings.
Two people have been arrested in the scandal. Key investor Ricardo Fernandez and his lawyer, Jose Camacho, are charged with misappropriating deposits and providing loans to other businesses in which they were investors.
The four banks shut down by the government were purchased in September and October by a group of investors headed by Fernandez, who had a lucrative business selling products to a network of state-run subsidized markets known as Mercal.
Fernandez's connections with state-run businesses have prompted opponents of Chavez to accuse him of failing to crack down on corruption and cronyism involving government officials and associated business people.
Chavez hit back Tuesday, saying Venezuela's opposition-aligned private news media are trying to confuse the country with what he called false suggestions that wrongful acts by top government officials led to the financial troubles at the banks.
"Now they're calling me corrupt," Chavez said, adding: "I don't have allies or untouchables."
He said authorities are closely monitoring other private banks for possible irregularities.
"We have a radar following another group of banks," he said. "I've got my eye on them."
He accused his opponents of trying to stir up panic among Venezuelans and cause a wave of withdrawals that could damage the banking system. He said the attempt would backfire on his foes.
"What's going to fall here is the private banking system," he said.
Chavez's government already has sought a bigger state role in banking, expanding its holdings in May by agreeing to buy Banco de Venezuela from Spain's Grupo Santander for about $1 billion. The government now owns five commercial banks, which together account for about 21 percent of deposits.
Chavez went on television after authorities halted operations at U21, a securities trading company majority owned by the closed Canarias bank.
Clients who showed up at U21's offices to check on their investments said employees told them they could not withdraw funds and should wait for further announcements by the government. Investigators raided the securities company last week, and prosecutors say they seized evidence for pending criminal investigations.
Prosecutors said the Disip investigative police also raided the offices of another securities company, Interbursa, on Tuesday and seized evidence.
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