Banks face risks due to US investments, low amounts of capital on hand - Venezuela

Business Materials 23 October 2008 00:16 (UTC +04:00)

Venezuelan banks are confronting plunging government bond prices, a thin capital cushion and uncertainty about U.S. investments, the Associated Press reported.

Chavez says Venezuela's public and private banks have been "well strengthened."

But at least 14 Venezuelan banks reported investments tied up in bankrupt Lehman Brothers or recently rescued Merrill Lynch and Wachovia Corp. at the end of the first half.

Many Venezuelan banks also hold government bonds that are dropping in price. One in four do not meet government requirements for capital reserves.

Finance Minister Ali Rodriguez says the government is closely following how Venezuelan banks fare to keep them from being hurt by the global financial crisis.