VENEZUELA: Citing "illiquidity" Venezuela shuts Banorte Bank the 8th private bank the Andean nation closed in 11 days

Record ID: 561438

  • Title: VENEZUELA: Citing "illiquidity" Venezuela shuts Banorte Bank the 8th private bank the Andean nation closed in 11 days
  • Date: 13th December 2009
  • Summary: CARACAS, VENEZUELA (DECEMBER 11, 2009) (REUTERS) EXTERIOR OF BANCO BANORTE VARIOUS OF DEPOSITORS OUTSIDE BANK
  • Embargoed: 28th December 2009 12:00
  • Keywords:
  • Topics: Finance,Domestic Politics
  • Reuters ID: LVAEX8TQOBT7HZ78K76HY8K3LPO3
  • Story Text: Venezuela shut private bank Banorte on Friday (December 11) on grounds that it was unable to to meet short-term obligations, threatening to undermine confidence in Venezuela's financial system.
    It was the eighth private bank closed by the government since November 30.
    Venezuelan President Hugo Chavez said he shut seven banks last week to uproot financial corruption and protect depositors. He also told remaining private banks to lend more or face extinction.
    The banks shut last week accounted for about 8 percent of Venezuela's total bank deposits. Two will be liquidated and the rest will be merged into a new state bank.
    State bank deposit insurance agency Fogade would protect 93 percent of Banorte's 68,865 depositors.
    Chavez said he wanted banks to boost payments for government deposit insurance to insure more deposits and help refund account holders in the closed banks.
    "I think it's necessary that we increase what banks provide to the guarantee fund," he said. "The banks should provide more information to FOGADE (Deposit Guarantee Fund). Things like this show the need for that and will also permit us... to elevate the guarantee's maximum."
    Chavez said he wanted banks to triple deposit insurance premiums from this month to 1.5 percent of deposits to raise the ceiling of Venezuela's insured deposits to 30,000 bolivars ($13,940) from 10,000 bolivars ($4,652).
  • Copyright Holder: REUTERS
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