Venezuelan banking crisis of 2009-2010
Encyclopedia
The 2009-2010 banking crisis occurred in Venezuela
when a number of the banks of Venezuela were taken over by the government, after "the revelation that several banks owned by [Hugo Chavez] supporters were in financial trouble after engaging in questionable business practices. Some were seriously undercapitalized, others were apparently lending top executives large sums of money, and at least one financier couldn't prove where he got the money to buy his banks in the first place." In November and December 2009 seven banks were taken over, accounting for around 12% of total deposits. In 2010 more banks were taken over. The government arrested at least 16 bankers and issued more than 40 corruption-related arrest warrants for others who had fled the country.
had led a group of investors in taking over four banks - Canarias, Confederado, Bolívar and BanPro - together accounting for 5.7 percent of Venezuela's banking sector. In late 2009 Fernandez was arrested in Venezuela for a variety of charges, including misappropriation of funds, in connection with the takeover due to liquidity problems of the four banks acquired by Fernandez.
The crisis saw the December 2009 resignation of a government minister, Jesse Chacón
, upon the arrest of his brother Arné Chacón in relation to a banking corruption scandal. He stated in media interviews, "I called the president and told him that in these conditions I would prefer to resign so that there would be no doubt about our transparency in this investigation".
Banco Bicentenario
was created in late 2009 through the merger with the existing state-owned bank Banfoandes of three banks (Bolívar, Central and Confederado Banks) nationalised as a result of the 2009 banking crisis. The new bank has around 20% of Venezuelan bank deposits.
Earlier in the year the government had already been forced to take over Stanford Bank Venezuela
, as well as encountering a corruption crisis at the state-owned Banco Industrial de Venezuela
which saw the latter's ex-president arrested on corruption charges.
, the country's 11th-largest bank, with deposits of 7.66 billion bolivars, or 2.82 percent of total deposits in the banking system, was taken over by Venezuela's banking regulator, after it had failed to meet minimum reserve requirements and investment quotas. It had been told to expand its capital base by 1.5bn bolivars (around $350m), and had only raised B100m. At least 12 other banks had been taken over since November 2009 after speculation about bank insolvency.
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
when a number of the banks of Venezuela were taken over by the government, after "the revelation that several banks owned by [Hugo Chavez] supporters were in financial trouble after engaging in questionable business practices. Some were seriously undercapitalized, others were apparently lending top executives large sums of money, and at least one financier couldn't prove where he got the money to buy his banks in the first place." In November and December 2009 seven banks were taken over, accounting for around 12% of total deposits. In 2010 more banks were taken over. The government arrested at least 16 bankers and issued more than 40 corruption-related arrest warrants for others who had fled the country.
2009
In September and October 2009 Ricardo Fernández BarruecoRicardo Fernández Barrueco
Ricardo Fernández Barrueco is a Venezuelan businessman, whose net worth was estimated in 2005 at $1.6bn with "a web of 270 companies in industries as diverse as tuna-fishing and banking"...
had led a group of investors in taking over four banks - Canarias, Confederado, Bolívar and BanPro - together accounting for 5.7 percent of Venezuela's banking sector. In late 2009 Fernandez was arrested in Venezuela for a variety of charges, including misappropriation of funds, in connection with the takeover due to liquidity problems of the four banks acquired by Fernandez.
The crisis saw the December 2009 resignation of a government minister, Jesse Chacón
Jesse Chacón
Jesse Alonso Chacón Escamillo was Venezuelan Minister of Interior and Justice from September 2004 to January 2007, under the presidency of Hugo Chávez. He had been a close ally of Chávez since 1990 or earlier...
, upon the arrest of his brother Arné Chacón in relation to a banking corruption scandal. He stated in media interviews, "I called the president and told him that in these conditions I would prefer to resign so that there would be no doubt about our transparency in this investigation".
Banco Bicentenario
Banco Bicentenario
Banco Bicentenario is a bank based in Caracas. It was created in late 2009 through the merger with the existing state-owned bank Banfoandes of three banks and after BaNorte Bank, nationalised as a result of the 2009 banking crisis. The new bank has around 20% of Venezuelan bank deposits....
was created in late 2009 through the merger with the existing state-owned bank Banfoandes of three banks (Bolívar, Central and Confederado Banks) nationalised as a result of the 2009 banking crisis. The new bank has around 20% of Venezuelan bank deposits.
Earlier in the year the government had already been forced to take over Stanford Bank Venezuela
Stanford Bank Venezuela
Stanford Bank Venezuela was Stanford International Bank's subsidiary in Venezuela. It was headquartered in Caracas and had many branches throughout Venezuela. The Venezuelan banking regulator estimated that Venezuelans had placed around $2.5bn in deposits with Stanford International...
, as well as encountering a corruption crisis at the state-owned Banco Industrial de Venezuela
Banco Industrial de Venezuela
Banco Industrial de Venezuela , BIV, is a Venezuelan bank. In May 2009 the former president of BIV, Luis Rafael Quiro, was arrested for alleged corruption. The bank was at the time the largest state-run financial institution in the country.BIV was established in 1937 with 60% state capital and 40%...
which saw the latter's ex-president arrested on corruption charges.
2010
In June 2010 Banco FederalBanco Federal
Banco Federal is a Venezuelan bank based in Caracas. At the end of April 2010 it was the country's 11th-largest bank, with deposits of 7.66 billion bolivars, or 2.82 percent of total deposits in the banking system. In June 2010 the bank was taken over by Venezuela's banking regulator, after it had...
, the country's 11th-largest bank, with deposits of 7.66 billion bolivars, or 2.82 percent of total deposits in the banking system, was taken over by Venezuela's banking regulator, after it had failed to meet minimum reserve requirements and investment quotas. It had been told to expand its capital base by 1.5bn bolivars (around $350m), and had only raised B100m. At least 12 other banks had been taken over since November 2009 after speculation about bank insolvency.