VENEZUELA COVERNMENT TAKE CONTROL OF THE COUNTRY BANKS

LA PAZ, Bolivia — The government of President Hugo Chávez of Venezuela, facing a crisis at several banks acquired by his supporters, moved over the weekend to assert greater financial control by detaining one of the country’s most powerful financiers and forcing the resignation of the banker’s brother, who is a minister and a top Chávez aide.

• The arrest on Saturday of the financier, Arné Chacón, and the removal of his brother, Jesse, as science minister, which Mr. Chávez announced Sunday, points to a broadening purge of a group of magnates known as Boligarchs, who built immense fortunes this decade on the back of close government ties. Their nickname is derived from the combination of Russian-style oligarchs and Simón Bolívar, the historical icon of Mr. Chávez’s political movement.
• Besides Arné Chacón, Venezuelan authorities have detained several other bankers, including Ricardo Fernández Barrueco, a billionaire who went into finance after assembling a business empire that sold food to state-controlled supermarkets. All the bankers are believed to be under questioning by the Disip, Venezuela’s intelligence secret police.
• “We have been watching in awe at everything that has gone on over the past week, from the collapse and runs on the banks to the revolution eating its own,” said Russell M. Dallen Jr., who oversees capital markets operations at BBO, a Caracas investment bank.
• The crisis in the banking system began unfolding last Monday when the government seized control of four troubled banks, including those with ties to Mr. Fernández Barrueco, and then seized three other banks on Friday. Mr. Fernández Barrueco was arrested after he could not explain the origins of money used to buy the banks.
• Together, all the seized banks are estimated to account for less than 20 percent of the country’s banking system, dimming some fear that the crisis could infect other areas of Venezuela’s oil-based economy and easing concern of a Dubai-like debt crisis’s happening in Venezuela. finance

Source: NYT