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Hugo Chavez Says He Has ‘No Problem’ Nationalizing Banks

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					Bloomberg Printer-Friendly Page                                                                               1/31/10 10:17 AM




    Chavez Says He Has ‘No Problem’ Nationalizing Banks (Update2)
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    By Daniel Cancel

    Nov. 29 (Bloomberg) -- Venezuelan President Hugo Chavez said he has “no problem” nationalizing the country’s
    banking sector and that any private bank that breaks the nation’s laws will be seized.
    Chavez criticized private banks for not extending development loans and said some refuse to comply with the
    country’s laws. Four banks were seized on Nov. 20.
    Chavez, who has nationalized the oil, utility, metal and cement industries, decided this year to purchase Banco de
    Venezuela, a unit of Spain’s Banco Santander SA, for $1.05 billion to expand the state’s presence in the
    banking sector. The government took over the four private banks for allegedly failing to meet lending targets,
    making unauthorized share transactions and diverting deposits.
    “To all private bankers in the country, he who slips, loses, independent of the size of the bank,” Chavez said today
    on state television during his weekly program “Alo Presidente.” “You want me to nationalize the banking sector? I
    have no problem.”

    Ricardo Fernandez Barrueco, the owner of Banco Confederado SA, Banco Canarias de Venezuela CA, Banpro Banco
    Universal and Bolivar Banco CA, is being held by the police. On Nov. 27, attorney general Luisa Ortega Diaz
    barred 16 bank executives from leaving the country.
    ‘Get Thrown in Jail’
    The four banks represented about 6 percent of total deposits in Venezuela’s financial system. The executives may
    try to flee the country and should be put in jail, he said.
    “I told the attorney general to send anyone to prison that has a role in this,” Chavez said. “They have airplanes,
    private airstrips. I’m asking that bankers who do business with the money of the people, getting rich, get thrown
    in jail.”
    At least four international banks have a presence in the Venezuela banking sector, including Spain’s Banco
    Bilbao Vizcaya Argentaria SA, Amsterdam-based ABN Amro Holding NV and U.S.- based Citigroup Inc.
    The banking sector had 248 billion bolivars ($115.5 billion) in deposits among 50 institutions at the end of
    October, according to Softline Consultores, a banking consulting firm in Caracas.
    The Venezuelan government this year took control of Stanford Bank SA Banco Comercial and closed the local
    offices of Antigua-based Stanford International Bank Ltd. after the owner, R. Allen Stanford, was accused of
    defrauding investors of $8 billion.

    Venezuelan investors had as much as $3 billion in Stanford’s Antigua bank, the banking superintendent said in
    February.

    ‘Gigantic Amounts’
    Chavez said that state banks, including Banfoandes, have been depositing “gigantic” amounts of money in
    private banks instead of providing loans for productive sectors of the economy. Chavez said the government is
    investigating the mishandling of funds in state-run banks and said keeping funds in private banks is “treason.”



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Bloomberg Printer-Friendly Page                                                                           1/31/10 10:17 AM


    The state controls 21 percent of the banking sector.

    “I was studying banks and saw that Banfoandes has gigantic amounts of money deposited in private banks,”
    Chavez said. “How can you have a state bank and resources for the people deposited in private banks? That’s
    called treason.”
    To contact the reporter on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net.

    Last Updated: November 29, 2009 15:02 EST




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