Banco Federal

Banco Federal
Industry Finance and Insurance
Founded 1982
Defunct 2010
Headquarters Caracas, Venezuela
Products Financial Services

Banco Federal is a Venezuelan bank based in Caracas. At the end of April 2010 it was the country's 11th-largest bank, with deposits of 7.66 billion bolivars, or 2.82 percent of total deposits in the banking system.[1] In June 2010 the bank was taken over by Venezuela's banking regulator, after it had failed to meet minimum reserve requirements and investment quotas.[2] It had been told to expand its capital base by 1.5bn bolivars (around $350m), and had only raised B100m.[1] At least 12 other banks had been taken over since November 2009 after speculation about bank insolvency.[1]

On 14 June 2010 Victor Vargas, head of Venezuela's National Banking Council, indicated that he supported the takeover. "Vargas said he's sorry the takeover of Banco Federal had to occur, but indicated he supported the government action by saying that sometimes interventions are necessary to keep the overall banking system running smoothly."[3] Banco Federal is to be liquidated by the government.[4]

Banco Federal's President Nelson Mezerhane owned a 25.8% stake in TV station Globovisión. After the state intervention Mezerhane violated a travel prohibition and left the country, and the government took over the Globovisión stake.[2] In August 2010 President Hugo Chavez accused Mezerhane of having illegally transferred Banco Federal funds to a construction company owned by Mezerhane.[5]

References

  1. 1 2 3 BusinessWeek, 14 June 2010, Venezuela Seizes Banco Federal for ‘Grave’ Weakness (Update2) Archived July 22, 2010, at the Wayback Machine.
  2. 1 2 Venezuelanalysis.com, 21 July 2010, Venezuelan Government Acquires Minority Share and Possible Board Seat in Globovisión
  3. ↑ Wall Street Journal, 14 June 2010, Venezuela Bankers Seek To Reassure Public After Bank Seizure
  4. ↑ El Universal, 19 August 2010, New law prohibits media owners from holding shares in banks
  5. ↑ Vheadline.com, 20 August 2010, President Chavez defends middle class families in Mezerhane debacle

External links



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