Venezuela may be setting itself up to be the next mini financial crisis such as Dubai. has become
That’s because Hugo Chavez has decided to start nationalizing Venezuelan banks, which so far have mostly escaped his expropriating ways.
Venezuelan credit markets weren’t been happy about this at all.
Reuters: With rumours swirling about stability after the government closed four failing banks, Chavez twice this week stoked fears, threatening to nationalize banks involved in malpractice or failing to aid development in Venezuela.
But on Thursday he cooled his rhetoric after investors dumped Venezuelan bonds and the bolivar. Business groups and banks also released statements saying the system was solid.
“The government is putting out fire … We are fixing the problem,” he said, saying both the country and the bank system will benefit from his measures. “We will all emerge stronger.”