Venezuelan President Hugo Chávez Frias reportedly stated yesterday that he would consider nationalising any banks that refuse to finance agricultural projects sponsored by the government. presently, approximately one-quarter of the country's financial institutions are government controlled.
The banks reportedly named by Chávez are;
(1) Banco Mercantil
(3) Banco Provincial
Whether this threat will actually result in the nationalisation of these, or other privately-owned banks, is not known, but due to the fact that the corrupt judicial system cannot be relied upon to redress such actions, and that compensation is rarely paid for nationalised property in Venezuela, there is a risk that bank owners could lose everything.
Risk managers whose banks deal with Venezuela would do well to monitor the situation closely.