

Currently released so far... 12478 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy Niamey
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sapporo
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
AU
ASEC
AE
AF
AORC
AEMR
AMGT
ABUD
AFFAIRS
APER
AS
AMED
AY
AG
AR
AJ
AL
AID
AM
AODE
ABLD
AMG
AFIN
ATRN
AGAO
AFU
AN
AA
ALOW
APECO
ADM
ARF
ASEAN
APEC
AMBASSADOR
AO
ASUP
AZ
AADP
ACOA
ANET
AMCHAMS
ACABQ
ASECKFRDCVISKIRFPHUMSMIGEG
APCS
AGMT
AINF
AIT
AORL
ACS
AFSI
AFSN
ACBAQ
AFGHANISTAN
ADANA
ADPM
AX
ADCO
AECL
AMEX
ACAO
ASCH
AORG
AGR
AROC
ASIG
AND
ARM
AQ
ATFN
AC
AUC
ASEX
AER
AVERY
AGRICULTURE
BL
BR
BO
BA
BD
BM
BK
BG
BU
BB
BH
BTIO
BY
BEXP
BP
BE
BRUSSELS
BF
BIDEN
BT
BX
BC
BILAT
BN
BBSR
BTIU
BWC
BMGT
CA
CASC
CVIS
CM
CH
CO
CU
CD
CWC
CI
CS
CY
CMGT
CF
CG
CR
CB
CV
CW
CE
CBW
CT
CPAS
COUNTERTERRORISM
CJAN
CODEL
CIDA
CDG
CDC
CIA
CTR
CNARC
CSW
CN
CONS
CLINTON
COE
CROS
CARICOM
CONDOLEEZZA
COUNTER
CL
COM
CICTE
CIS
CFED
COUNTRY
CJUS
CBSA
CEUDA
CLMT
CAC
COPUOS
CIC
CBE
CHR
CTM
CVR
CITEL
CLEARANCE
CACS
CAN
CITT
CARSON
CACM
CDB
CAPC
CKGR
CBC
EC
EG
EPET
ECON
ETRD
EFIN
EIND
EMIN
ENRG
EAID
EAGR
EUN
ETTC
EAIR
ENIV
ES
EU
EINV
ELAB
ECIN
EFIS
ELTN
EWWT
ECPS
ECONOMIC
ENGR
EN
EINT
EPA
ELN
ESA
EZ
ER
ET
EFTA
EINVECONSENVCSJA
EUMEM
ETRA
EXTERNAL
EI
EUR
EK
ERNG
ENGY
ETRDEINVECINPGOVCS
ENERG
EINVEFIN
ENVR
ECA
ELECTIONS
ETC
EUREM
ENNP
EFINECONCS
EURN
ECINECONCS
EEPET
EXIM
ERD
ENVI
ETRC
ETRDEINVTINTCS
ETRO
EDU
ETRN
EAIG
ECONCS
ECONOMICS
EAP
ECONOMY
EINN
EIAR
EXBS
ECUN
EINDETRD
EREL
EUC
ESENV
ECONEFIN
ECIP
EFIM
EAIDS
ETRDECONWTOCS
EUNCH
EINVETC
IZ
IT
IR
IS
IN
IC
IAEA
IO
ICAO
IWC
ID
IV
ISRAEL
IAHRC
IQ
ICTR
IMF
IRS
IDP
IGAD
ICRC
ICTY
IMO
IL
INRA
INRO
ICJ
ITU
IBRD
INMARSAT
IIP
ITALY
IEFIN
IACI
ILO
INTELSAT
ILC
ITRA
IDA
INRB
IRC
INTERPOL
IA
IPR
IRAQI
ISRAELI
INTERNAL
ISLAMISTS
INDO
ITPHUM
ITPGOV
ITALIAN
IBET
INR
IEA
IZPREL
IRAJ
ITF
IF
KDEM
KU
KPAL
KNNP
KCRM
KZ
KN
KS
KJUS
KTFN
KSCA
KV
KISL
KPAO
KPKO
KIRF
KTIA
KIPR
KFLO
KFRD
KTIP
KAWC
KSUM
KCOM
KAID
KE
KTDB
KMDR
KOMC
KWBG
KDRG
KVPR
KTEX
KGIC
KWMN
KSCI
KCOR
KACT
KDDG
KHLS
KSAF
KFLU
KSEO
KMRS
KSPR
KOLY
KSEP
KVIR
KGHG
KIRC
KUNR
KIFR
KCIP
KMCA
KMPI
KBCT
KHSA
KICC
KIDE
KCRS
KMFO
KRVC
KRGY
KR
KAWK
KG
KFIN
KHIV
KBIO
KOCI
KBTR
KNEI
KPOA
KCFE
KPLS
KSTC
KHDP
KPRP
KCRCM
KLIG
KCFC
KTER
KREC
KTBT
KPRV
KSTH
KRIM
KRAD
KWAC
KWMM
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KOMS
KX
KMIG
KRCM
KVRP
KBTS
KPAONZ
KNUC
KNAR
KPWR
KNPP
KDEMAF
KNUP
KNNPMNUC
KERG
KGIT
KPAI
KTLA
KFSC
KCSY
KSAC
KTRD
KID
KOM
KMOC
KJUST
KGCC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFTFN
KO
KNSD
KHUM
KSEC
KCMR
KCHG
KICA
KPIN
KESS
KDEV
KCGC
KWWMN
KPAK
KWNM
KWMNCS
KRFD
MOPS
MCAP
MPOS
MARR
MO
MNUC
MX
MASS
MG
MY
MU
ML
MR
MILITARY
MTCRE
MT
MEPP
MA
MDC
MP
MAR
MASSMNUC
MARAD
MAPP
MZ
MD
MI
MEETINGS
MK
MCC
MEPN
MRCRE
MAS
MIL
MASC
MC
MV
MTCR
MIK
MUCN
MEDIA
MERCOSUR
MW
MOPPS
MTS
MLS
MILI
MTRE
MEPI
MQADHAFI
MAPS
NO
NATO
NL
NP
NZ
NSF
NI
NH
NG
NAFTA
NU
NASA
NR
NATOPREL
NSSP
NSG
NA
NT
NW
NK
NPT
NPA
NATIONAL
NPG
NSFO
NS
NSC
NE
NGO
NDP
NIPP
NRR
NEW
NZUS
NC
NAR
NV
NORAD
OTRA
OPCW
OVIP
OAS
OREP
OPIC
OIIP
OPRC
ODIP
OEXC
OPDC
OSCE
OIC
OSCI
OECD
OFDP
OFDA
OMIG
OPAD
OFFICIALS
OVP
OIE
OHUM
OCS
OBSP
OTR
OSAC
ON
OCII
OES
PGOV
PREL
PHUM
PTER
PINS
PINR
PREF
PK
PROP
PA
PARM
PBTS
PMAR
PM
PGIV
PE
PRAM
PHUH
PHSA
PL
PNAT
PO
PLN
PAO
PSA
PHUMPGOV
PF
PEL
PBIO
POLITICS
PHUMBA
PAS
POL
PREO
PAHO
PMIL
POGOV
POV
PAK
PNR
PRL
PG
PREFA
PSI
PINL
PU
PARMS
PRGOV
PALESTINIAN
PAIGH
POLITICAL
PARTIES
POSTS
PROG
PORG
PTBS
PUNE
POLICY
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PP
PS
PY
PTERE
PGOF
PKFK
PSOE
PEPR
PPA
PINT
PRELP
PSEPC
PGOVE
PINF
PNG
PGOC
PFOR
PCUL
POLINT
PGGV
PHALANAGE
PARTY
PGOVLO
PHUS
PDEM
PECON
PROV
PHUMPREL
RS
RU
RELATIONS
RW
RO
RM
RP
ROOD
RICE
RUPREL
RSO
RCMP
REACTION
REPORT
REGION
RIGHTS
RF
RFE
RSP
RIGHTSPOLMIL
ROBERT
SU
SCUL
SNAR
SOCI
SF
SA
SHUM
SENV
SP
SR
SY
SANC
SC
SMIG
SZ
SARS
SW
SEVN
SO
SEN
SL
SNARCS
SNARN
SI
SG
SN
SH
SYR
SAARC
SPCE
SHI
SCRS
SENVKGHG
SYRIA
SWE
STEINBERG
SIPRS
ST
SNARIZ
SSA
SK
SPCVIS
SOFA
SIPDIS
SAN
TC
TI
TBIO
TH
TSPL
TRGY
TSPA
TPHY
TU
TW
TS
TAGS
TK
TX
TNGD
TZ
TF
TL
TV
TN
TD
TIP
TR
TP
TO
TT
TFIN
THPY
TERRORISM
TINT
TRSY
TURKEY
TBID
US
UK
UNGA
UP
UZ
UNMIK
USTR
UNO
UNSC
UN
UNESCO
UNAUS
UNHRC
UY
UG
UNHCR
UNCND
USOAS
USEU
UNICEF
UNEP
UV
UNPUOS
UNCSD
USUN
UNCHR
UNDC
USNC
UE
UNDP
UNC
USPS
USAID
UNVIE
UAE
UNFICYP
UNODC
UNCHS
UNIDROIT
UNDESCO
UNCHC
Browse by classification
Community resources
courage is contagious
Viewing cable 09CARACAS1595, Venezuela: Banco Bicentenario Opens, But is the Banking
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09CARACAS1595.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09CARACAS1595 | 2009-12-23 19:44 | 2010-11-30 21:30 | CONFIDENTIAL | Embassy Caracas |
VZCZCXRO4498
RR RUEHAO RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS
RUEHTM
DE RUEHCV #1595/01 3571944
ZNY CCCCC ZZH
R 231944Z DEC 09
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 0199
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 001595
SIPDIS
ENERGY FOR CDAY AND ALOCKWOOD
HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR MKACZMAREK
NSC FOR DRESTREPO AND LROSSELLO
USDOC FOR 4332 MAC/ITA/WH/JLAO
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE
E.O. 12958: DECL: 2019/12/23
TAGS: ECON EFIN VE
SUBJECT: Venezuela: Banco Bicentenario Opens, But is the Banking
Episode Over?
REF: 09 CARACAS 1553; 09 CARACAS 1537; 09 CARACAS 1509
09 CARACAS 1491
CLASSIFIED BY: DUDDY, AMBASSADOR, DOS, AMB; REASON: 1.4(B), (D)
¶1. (C) Summary: President Chavez officially inaugurated Banco
Bicentenario on December 21, thus effectively re-opening three of
the eight banks the Venezuelan government (GBRV) has taken over or
shut down since November 20. The National Assembly also passed
changes to the banking law to triple the amount of deposit
insurance, with the new limit applied retroactively to depositors
in the two banks in the process of liquidation. If the episode of
interventions is indeed over, the GBRV will have increased its
share in the banking sector, gained an important foothold in the
insurance industry, and taken over a number of other companies,
particularly in the food processing and distribution sector. While
the exact origin of the episode remains unclear, it appears to have
resulted from a combination of a power struggle among GBRV
officials and insiders and the precarious financial situation of
the banks themselves. A major question mark remains Banco Federal,
a medium-sized bank owned by opposition businessman Nelson
Mezerhane. Chavez and Mezerhane recently traded barbs, with
Mezerhane claiming forces associated with the GBRV were conspiring
to bring down his bank and Chavez characterizing Federal as "having
had grave problems." End summary.
New Steps in an Ongoing Saga
¶2. (U) President Chavez launched a new state-run bank, Banco
Bicentenario, on December 21. Bicentenario is essentially the
union of Banfoandes, a pre-existing public bank, with Central,
Bolivar, and Confederado, three of the eight banks the GBRV has
taken over or shut down since November 20 (refs A-D). Depositors
in these four banks, who have not had access to their money since
November 30 (for Bolivar and Confederado) or December 4 (for
Central), can now transact business normally. Taking figures
provided by the Superintendency of Banks (Sudeban) for commercial
and universal banks, the banks composing Bicentenario represented
5.3 percent of the banking sector by assets and 9.5 percent by
deposits as of November 30 (the latest statistics available). The
extent to which depositors have withdrawn or will withdraw their
money remains to be seen, although there were no reports of long
lines at Bicentenario branches on December 21.
¶3. (U) On December 15 the National Assembly approved modifications
to the banking law that, among other things, will increase the
deposit guarantee offered by the Fund for Guarantee of Deposits and
Banking Protection (Fogade) from 10,000 bolivars (Bs; USD 4,650 at
the official exchange rate) to Bs 30,000, an amount requested by
President Chavez. This increase will apply retroactively for a
limited period of time to depositors in Canarias and and Banpro,
the two banks in the process of liquidation. Banks' contributions
to Fogade will also be raised from 0.5 to 1.5 percent of deposits
as maintained at the close of each semester. (Note: For these
changes to become law, President Chavez must sign the modified law
and it must be published in the Official Gazette. To the best of
our knowledge, it has not yet been published. President Chavez
recently said he might seek further changes to the law. End note.)
Is the Episode of Interventions Over?
¶4. (C) Whether this episode of interventions is over remains a
question mark. There are several other small banks and financial
institutions which fit the pattern of the eight banks intervened in
CARACAS 00001595 002 OF 003
the sense of being weak financially and having been taken over
recently by individuals allegedly close to the government. Two
pending purchases, that of Inverunion by Gonzalo Tiraldo and Banco
Federal by Jose Zambrano, have reportedly been rejected by Sudeban.
Most but not all financial sector analysts and participants Econoff
has contacted continue to believe the episode poses no systemic
risk to the sector given the small sizes and weak reputations of
the banks involved, in comparison with the strong fundamentals of
most of the larger banks. One dissenting voice is that of xxxxxxxxxxxx
reputation) and an outspoken critic of GBRV policies. xxxxxxxxxxxx
called Econoff December 17 to report that, according to information
he had received, several medium-sized or large banks (or their
owners) were putting dollar-denominated assets into collateral
accounts in Florida in return for emergency loans in bolivars.
¶5. (C) Banco Federal remains a major question mark. As reported
previously (ref A), Federal, a medium-sized bank accounting for 3
percent of the sector by assets, is considered weak by several
experts, has been subject to several runs, and reportedly even
received an emergency loan from the GBRV. Adding to the intrigue,
Federal's owner, opposition businessman and minority owner of
opposition TV station Globovision Nelson Mezerhane, recently traded
barbs with President Chavez. In an interview published in local
daily El Mundo December 17, Mezerhane claimed "active laboratories"
that included "people with ties" to the GBRV had disseminated
rumors about Federal's health in an attempt to instigate runs.
Chavez lashed back in a December 19 broadcast, characterizing
Federal as a bank "that has had grave problems," ordering an
investigation into what Mezerhane said, and cautioning that "the
time in which public institutions help private banks like Federal
is over." In an interview published December 20 in local weekly La
Razon, opposition economist Jose Guerra claimed former Vice
President and GBRV insider Jose Vicente Rangel was seeking to bring
down Federal, partly out of bitterness at the fall of his business
associate Pedro Torres (who led the group that owned three of the
intervened banks).
What Initiated the Episode in the First Place?
¶6. (C) With over a month having passed since the initial
interventions, a number of theories have sprung up to explain why
the GBRV chose to act in the way it did and at the time it did.
Many observers believe President Chavez ordered the initial
interventions as the culmination of a power struggle taking place
among GBRV officials and presumed insiders. Theories on the
protagonists in this presumed power struggle abound, however. We
have heard variations such as Diosdado Cabello vs. Ricardo
Fernandez and Jesse Chacon; Ali Rodriguez and representatives of
the traditional left vs. Ricardo Fernandez and members of the
military clique; and President Chavez vs. selected inner circle
members and insiders with their own political projects. An
intriguing tangent is that an alleged report by Cuba's intelligence
service plays a role in several of these explanations. Other
observers believe the GBRV's hand was forced by the terrible
financial situation at the intervened banks, with President Chavez
preferring to take action before the problems worsened and well
before parliamentary elections scheduled for September 2010.
Whatever the origins of the episode, our contacts credit President
Chavez with seeing the interventions as an opportunity to trumpet
anti-corruption credentials by sending the message, as one of our
contacts put it, of "I put bankers in jail."
Changes in the Financial Sector and Business Landscape
CARACAS 00001595 003 OF 003
¶7. (C) The intervention episode has to date led to several changes
in the financial and business landscape that are worth noting.
First, the GBRV has increased its share in the banking sector by at
least five percentage points. With the opening of Banco
Bicentenario, public banks will comprise roughly 20 percent of the
sector by assets and 25 percent by deposits. Second, the GBRV has
acquired an important foothold in the insurance sector with the
associated takeover of Seguros La Previsora and intended formation
of state-owned Bolivariana de Seguros (ref B). (Note: As of June
2009, La Previsora was the fourth largest insurance company in
Venezuela with market share of 8.3 percent. End note.) Many
contacts, including xxxxxxxxxxxxxxxxxxxxxxxxbelieve the GBRV will
consolidate the insurance accounts
position to exert greater control over private medical services
providers. Finally, GBRV takeover of Ricardo Fernandez's companies
in the food and food distribution sectors will further the shift
toward GBRV control in those sectors. (Note: It is still unclear
from GBRV statements if the takeover of Fernandez's companies will
be temporary or permanent. We would not be surprised if it were
the latter. End note.)
Comment
¶8. (C) As we suspected when it began on November 20, much about
this episode remains obscure. We are not surprised that there are
conflicting explanations for how the episode started, though it
seems clear internal power struggles played a key role. What is
still a mystery to us is why the GBRV has not yet used this episode
as an excuse to take over Banco Federal, thus taking an important
asset from Nelson Mezerhane. While we would have expected the GBRV
to have taken it over several weeks ago if it indeed it was going
to, the exchange of barbs between Mezerhane and Chavez certainly
keeps the possibility alive. Perhaps the GBRV has not moved to
take Federal because it fears systemic implications: in a clear
reference to Federal, respected economic consultancy Sintesis
Financiera wrote in a recent report that "concerns will rise and
markets will destabilize if interventions reach larger banks owned
by individuals perceived to be at odds with the government." There
could certainly be other explanations, however. End comment.
DUDDY