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Venezuela to Liquidate Banco Federal, Official Gazette Says

Venezuela ordered the liquidation of Banco Federal CA and three related companies, according to a resolution published in the Official Gazette today.

The country’s banking regulator took over Federal in June, citing liquidity concerns, and has been paying the bank’s customers through government-run banks and the deposit guarantee fund. Venezuela will sell off assets to pay bank employees and repay the deposit fund, Finance Minister Jorge Giordani said Aug. 10.

President Hugo Chavez has closed 12 banks and taken control of more than 40 brokerages since November 2009 in a bid to increase regulation and the government’s presence in the financial sector. Chavez accused Federal President Nelson Mezerhane, who is also part owner of opposition television network Globovision, of defrauding clients and building a mansion in Miami with depositors’ money.

To contact the reporter on this story: Corina Rodriguez Pons in Caracas at crpons@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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