Venezuela seizes four private banks

AFP

CARACAS: The Venezuelan government said Friday it was seizing four small private banks due to irregularities, but vowed the measure would not impact the state of the domestic financial system.

The move was just the latest in a string of nationalization measures by the government of firebrand leftist leader Hugo Chavez affecting key strategic industries, including electric utilities, cement, steel, oil services and banking.

"These measures are intended to ensure the fundamental rights of bank depositors and creditors... We are confident that we are assuring the health of the Venezuelan banking system," Finance Minister Ali Rodriguez said in a statement.

The affected banks were Banco Canarias, Bolivar, BanPro and Banco Confederada. They were to remain open during the takeover.

The announcement came just days after the government revealed that Venezuela has officially entered a recession, recording a 4.5-percent contraction of gross domestic product for the third quarter, while Rodriguez said the GDP would likely shrink by 1.0 to 2.2 percent this year.

He attributed the slowdown of the economy, which grew 4.8 percent in 2008, to the decline of oil prices and Venezuela's efforts to comply with production cuts agreed to by the Organization of Petroleum Exporting Countries (OPEC).