BCV Law Reforms: A Bailout for Bolibourgeois Bankers

The National Assembly tossed a desperately needed life raft to the floundering financial fortunes of corrupt Bolivarian “bankers” like Ricardo Fernandez Barrueco, Arne Chacon Escamilla, and Pedro Torres Ciliberto, among others.

The assembly also guaranteed the rising fortunes of favored financial “intermediaries” like Baldo Sanso, the brother-in-law of Energy Minister and Pdvsa President Rafael Ramirez.

And, of course, the Assembly also bailed out every Fourth Republic “banquero” who joined arms with the regime over the past decade, like the Gils and Salvatierras, among others.

How so?

The still unsigned reform of the Central Bank Law approved unconstitutionally in recent days erased the legal prohibitions which ensured the Central Bank’s autonomy and independence, which comes as no surprise.

The regime has worked tirelessly for years to reduce the Central Bank’s autonomy and independence. The reforms approved by the assembly are, de facto, de coup de grace.

Until about a week ago, the Central Bank was prohibited from financing the government. It could not buy sovereign bonds. It could not accept sovereign or other state-issued bonds as collateral for Central Bank loans to financial institutions.

All those vitally needed prohibitions meant to guarantee the Central Bank’s autonomy and independence from any political or government interference were erased.

As a result, broken banks like Banpro, Bolivar Banco, Banco Confederado and Banco Canarias – all owned by Fernandez Barrueco – now have the opportunity to transfer their losses to the Central Bank by trading in sovereign and Pdvsa bonds.

Just in time, since the four banks reportedly are in the process of being merged into a single financial group.

And so can every other busted bank in the country. Which banks are we talking about?

All of them are listed on the document Pdvsa issued identifying the commercial banks, investment banks and other financial entities approved by Pdvsa to buy the Pdvsa 2014, 2015 and 2016 combo bonds – over $3.2 billion worth – this week.

There may be some good financial entities on that list, but in the main…. readers will sense the drift.

About Caracas Gringo

Representing less than 0.00000000001515152% of the world population as of 31 December 2011.
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