Chavez To Take Over Money Creation From Private Banks For Venezuelans

AFP: Venezuela’s government will create a new state-run financial institution out of four private banks that were shut down this week for alleged accounting irregularities, President Hugo Chavez said Sunday. “We will create another large bank … as a result of a merger” between the closed institutions, Chavez announced on his weekly television and radio program ‘Alo Presidente.’

The new bank, to be called Banco Bicentenario — in honor of Venezuela’s 200th anniversary of independence next year — will be created from the remains of Confederado, Central, Bolivar and Banco Real, all shuttered to investigate the alleged irregularities. State bank Banfoandes will also be involved in the merger, he added. Along with those institutions, the Chavez administration also closed down Banco Canarias and BanPro.

In announcing Confederado and Bolivar’s closure, Chavez pledged the banks “will become part of the public financial system.”

Since taking office in 2007, Chavez has moved to control firms in the electricity production, cement, steel, oil services and banking industries.

More than 70% of the Venezuelan banking sector is privately owned, but the state has become the main financial actor, having nationalized in May Banco de Venezuela, the country’s third-largest bank and previously under the ownership of Spanish group Santander.

The leftist Chavez has indicated he may target more private banks, which he accused of having forsaken their lending “mission” in order to specialize in “financial speculation.”

http://www.google.com/hostednews/afp/article/ALeqM5jTMLVQEPfOkJR_1yuYZgWR8xYBUg

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