Venezuela Seen Seizing More Banks

Fitch believes that the controls the Venezuelan government imposes on banks, which makes their operations more challenging, could result in further government actions. The comment follows the recent seizure –and subsequent closing– of 4 local banks, as their financial profiles weakened. Fitch says that “increasing government intervention in the form of directed lending and interest controls, among other risks, has increasingly limited the private banks’ freedom to manage their own balance sheets, and has led to a gradual debilitation of once adequate balance sheets.” The government said it shuttered the banks because they breached regulatory requirements such as compulsory lending rules and interest rates controls. It also said the action was taken in light of the banks’ weak financial profile.