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Venezuela 'takes over local Stanford bank'

Reuters
Thursday 19 February 2009 08:26 EST
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Venezuela took control of a local bank owned by Allen Stanford, who faces US fraud charges, a government source said today as the impact of the American case spread through Latin America.

In recent days, depositors worried the trouble at Stanford International Bank would hurt Stanford Bank Venezuela and withdrew cash from the small local bank even though the companies' assets are separate, industry officials and bank customers said.

The government of President Hugo Chavez had sought to calm depositors' nerves, declaring yesterday the bank was healthy and even saying it was working to prevent a run on the bank.

But late yesterday, authorities decided to take action, the government official with knowledge of the deliberations said.

The Finance Ministry called an unusual early morning news conference to make an announcement, although it did not say what the topic would be.

Chavez, who blames problems in the global banking system on capitalist greed, said last year he would expropriate any bank that failed rather than bail it out.

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