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With new laws governing the insurance and securities markets already on the books, Venezuela’s unicameral National Assembly is continuing its revision of financial sector regulations by turning to banks. The National Assembly – which is dominated by supporters of President Hugo Chávez – passed the 135-page Banking Sector Institutions Act in a first vote on November 11th. Legislative leaders then allowed only a short, subsequent consultation period, with the National Assembly set soon to hold a second and final vote on the bill.
Almost a year after a wave of government intervention into more than a dozen small and medium-sized banks, the bill seeks to shrink the size of the industry by reducing the number of existing institutions and raising the bar for new ones to open. At the same time, several of the bill’s measures put a further pinch on the big banks, which are already dealing with a raft of loan portfolio quotas and interest rate caps. More viscerally, with the government recently embarking on an expropriation campaign including everything from cement producers to housing developments to agro-industrial suppliers, the bill raises the fear of easier bank takeovers.
Read more at Financial Services Briefing: “Assembly set to approve bank bill” (November 22nd)