Chavez warns private banks

Venezuelan president tells banks to work with his government or face sanctions.

    Chavez says that acquiring Banco de Venezuela will give his government more economic power [AFP]

    Chavez's government stepped up its role in the banking sector after reaching an agreement in May with Banco Santander, a Spanish banking group and the third largest bank in Europe.

    Acquisition

    The Venezuelan government purchased Banco de Venezuela, its local banking unit, and will formally assume control of the bank on July 3.

    Chavez believes that the acquisition will significantly increase the presence of Venezuela's government in the banking sector.

    "We will have more economic power," Chavez said.

    This is not the first time Chavez has threatened to go after banks that fail to meet state regulations.

    In January 2008, he threatened to "seize" private banks that neglected laws requiring them to set aside nearly a third of all loans for agriculture, mortgages and small businesses at favourable rates.

    SOURCE: Agencies


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