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United Socialist Party (PSUV) legislator Ricardo Sanguino called it necessary "to consolidate a responsible financial sector," what's entirely absent in America where giant banks are more predators than responsible financial institutions. Sanguino said Venezuela's new law "restrict(s) unregulated speculation. (Now) there is absolutely no chance that a banking institution becomes involved in irregularities," as happened previously.
Speculation now will be controlled by limiting the credit amount to individuals or private entities to "20% (of the) maximum amount of capital a bank can have out....Commercial banks, insurance companies, investment banks, and brokerage firms must also operate" separately, unlike in America without restraint.
Further, 5% of pre-tax bank profits must be used solely for communal council projects, and 10% of bank capital for a fund "to pay wages and pensions in case of bankruptcy."
While the new measure doesn't suggest full banking nationalization ahead, it does mean the government must act responsibly to secure the system for all Venezuelans, not solely for powerful capital interests as in America. Though many companies, including banks, have been nationalized in the last decade, "private banks still play a majority role (with) roughly 70% of assets."
In May 2009, the government bought the Bank of Venezuela from Spain's Santander Group after nationalizing it in July 2008. In June 2010, it took over Banco Federal operations after temporarily closing and investigating it for failing to comply with minimum reserve levels and legal quotas for productive sector investments. Other nationalizations also occurred, amounting to 30% of Venezuelan banking, but not without criticism.
Distorted US Media and Washington Criticism
On December 8, ahead of the new banking law, Wall Street Journal writer Dan Molinski headlined, "Venezuela Threatens Takeover of Large Banks," saying:
Chavez "threatened to take control (of) Banco Bilboa Vizcaya Argentaria SA and other large institutions if they don't ensure that homes and apartments they finance are occupied immediately....(Earlier he) threatened to expropriate banks....saying they must follow government orders to provide more loans to small business owners and increase the number of home loans to poor people in their portfolio."
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