Venezuela targets private banks

Original source:

Venezuelan President Hugo Chavez has threatened to sanction private banks which fail to co-operate with his administration’s drive to construct a socialist economy.

Mr Chavez said that banks should facilitate exchange by providing credit to people buying houses or producing food, rather than generating massive profits for their owners.

‘If private Venezuelan banks don’t follow the path, comply with the constitution and the laws, they’ll have to be sanctioned,’ he said.

‘The only way this government and this socialist project will accept private banks is if they fulfil their duty to intermediate and join the government to promote economic development,’ Mr Chavez warned.

Caracas has stepped up its role in the banking sector since it reached an agreement with Spain’s Santander to purchase its local unit Banco de Venezuela last month.

Once it formally assumes control of the bank on July 3, the government will become the nation’s top financial player.

‘We will have more economic power,’ Mr Chavez observed.

This is not the first time that his administration has threatened to go after banks that fail to abide by 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.

He has threatened to nationalise commercial banks before but has not followed through on most of those threats.

Mr Chavez has alleged that US intelligence agencies were behind a purported assassination plot that prevented him from visiting El Salvador to attend the inauguration of fellow leftwinger Mauricio Funes on Monday.

‘I don’t doubt that the intelligence organisations of the United States are behind this,’ he charged, accusing them of plotting with Cuban terrorist Luis Posada Carriles to murder him.