Inadequate Management Everywhere Under Chavismo

April 15, 2011

Imagine you owned a bank or were a shareholder of it or had deposits in it and the Federal Reserve Bank said of your bank:

“Your Bank and its Agencies have to cease and desist from its unsafe and unsound banking practices in the United States, including, among other practices, operating for an extended period with negative or insufficient capital, failing to have adequate management at the Agencies, failing to exercise adequate risk management at the Agencies, and failing to adequately oversee the Agencies”

Doesn’t that sound like the bank from Hell?

On top of that, the Federal Reserve gieve,s you a fine of US$ 1.8 million dollars as established by law and further orders that Your Bank not accept any deposits or give out any loans until you fix all of the above.

Moreover, the Federal Reserve gives Your Bank 180 day to provide audited financial statements by a reputable international firm.

What would you think? How would you feel?

Well, this is exactly what happened today to the US branch of Banco Industrial de Venezuela, the Government-owned and run bank that has gone bankrupt twice during the Chavez administration and was intervened by its owner, the Government, in 2008.

Funny, those that did this, friends of the robolution, are not in jail.

Chavista management at its best?

Nice, no?

17 Responses to “Inadequate Management Everywhere Under Chavismo”

  1. El Pueblo Unido Says:

    In February of 2009, oil was $33.55 a barrel. Honestly, I began to fear for my compañero Hugo. But oil has just been climbing up since then, month after month after month. Even if it were true things are mismanaged, it doesn’t matter. The oil money will flow and flow and flow. Who is going to protest when things are going along OK and the money is flowing in? Put a bullet in Hugo’s head and you have a martyr for the ages like Gaitán or Guevara.

    I have been reading the papers, and I see Cuba is embracing capitalism and moving to the right. Luckily, Venezuela is rejecting capitalism and moving to the left. May Hugo’s rule last as long as the Castro brothers!

  2. Gordo Says:

    USA and Venezuela are opposite extremes: Monopoly capitalism vs Monopoly Socialism. Some things are best when they are socialized, economically speaking, there is a new book out which I want to get: Politically Incorrect Guide to Socialism, by Kevin D. Williamson.

  3. pol47 Says:

    Check out the deposits that went to the national banks in Cuba for the money. Chavez and his gang of crooks make the goverments of Papa Doc and Baby Doc of Haiti look honest.

    Day by day the situation in Venezuela becomes more dire yet the people of Venezuela sit on their hands and do nothing.

    Have another Polar and a glass of rum and enjoy your week.

  4. loroferoz Says:

    The biggest problem is that the crooks and fools that caused the bailout to happen were not fed whole to angry plaintiffs, together with their businesses, their personal properties and their whole lives.

    I am not one for nationalization. But if the State has to pay for private affairs with hard currency, it might as well BUY some shares, and the power to fire certain individuals to be later indicted.

    Liabilities in the order of billions of dollars and debts to be inherited by their great-great-great-grandchildren, as well as criminal charges to land them in jail with other scamsters… would have given some other people pause about the game of playing loose and fast with other people’s money.

  5. susan Says:

    None of the US crooks that caused the bailout have been charged with a crime. It is O.K. to steal from the citizens if you are one of “them”. The Venesuelans are not alone ! It is a worldwide disease.

  6. Roger Says:

    It would be interesting to know in what other countries they have branch banks. I think a lot of this sloppyness is to coverup commissions, bribes and other money movements including money laundering. When I was doing business in Venezuela, I would get checks from not only the big banks but, also, from US banks I never heard of. Most interesting was that checks from the same person would have a different version of their name ( mothers name or fathers name, middle names) on each account. At the very least the problem might be that they are making loans with Venezuelan bonds as collateral!

  7. loroferoz Says:

    Hugo Chavez must be a bit below par in this matter of State-run finances. It was common wisdom in Venezuela that the Banco Industrial de Venezuela (BIV) will sink at least once, and at times twice, in any given presidential period, together with it’s sister institutions. See:

    At it’s start, in 1937 it was a joint venture with private and public capital for financing industry. Sometime later it became wholly state-owned. And began to fold regularly. Memory fails me and I cannot find a history of all the BIV failures.

    Somewhere else, I read that the BIV financed importation substitution in the 1970s. Socialist silliness at it’s best. Back then it financed something, at all, which should be encouraging.

    Petro-state banking is a basket case. If Venezuelans have historically been embezzlers and morons (“vivos y pendejos”) for letting it exist, Venezuelans nowadays are only bigger morons (and embezzlers) than their predecessors, with Hugo Chavez insisting on “nationalizing” banks.

    The last paragraph is a fitting summary of the so-called 5th ( to me, rather 4¼) Republic in so many words, which is only different in not even being a Republic anymore.


    Socialism on facts not words

  9. Bill near Slidell Says:

    I would suspect that the value per person of the natural resources in Venezuela is quite a bit greater than in the USA. Although Alaskan resource discoveries may narrow the gap in the future.
    After visiting the BBC web site, the Bolivian revolution doesn’t appear to be going too well at the moment.

  10. Kepler Says:

    This Pygmalion is a joke.
    He claims to be “critical opposition” or something like that. Mind: it would b fine if he were just Chavista, but at least “critical” in an independent manner.

    Instead, he is not critical at all of the regime and the only thing he does is to try to associate those who criticize Chavez with corruption, etc.
    Pygmalion: why do you visit this blog?

  11. moctavio Says:

    Rudy: Banco Industrial gave out no mortgages, so it ahs nothing to do with it.

  12. moctavio Says:

    It’s our money Pygmallion. Mr Mezerhane had a bad bank for years because Governemnt’s allowed him to, including Chavez’ Government which injected Bs. 400 million (Bien Fuertes) to avoid it going under, that was irresponsible.

    What do I have to do whether or not Latino people went or not to jail? Maybe it was your fault, what do I know, what do I care? I had nothing to do with it, if my blog had existed I would have blasted Caldera, CAP and the regulators at the time. Before Chavez, Caldera’s Government was the worst we had. The point is why cant we have decent Government? How can the Venezuelan Government allow its only bank allowed to operate in the US to reach such a sorry state. If that’s fine with you, you are a fool.

    Your answer is you are happy with mediocrity. I am not.

    And Venezuela’s GDP is one trillion Bs.

  13. Pygmalion Says:

    Well at least the Federal Reserve Bank did not force the BIV in the US to close down. So this is just a slap on the wrist despite Miguel Octavio’s attempts to exaggerate the rectifications needed at the BIV. If it does not rectify and put its house in order then it may be closed down.

    Now let’s talk about the Banco Federal in Venezuela and what happened to the depositors money…….any comment Mr. Mezerhane? Or even better, the Banco Latino in 1994….Who went to jail for any of those embezzlements, eh, Miguel Octavio? Answer – no one!

  14. Eduardo Says:

    USA has much bigger capital than Venezuela. 200 banks, in the context of USA bank system, is much less than all the banks that are bankrupted in Venezuela.

    USA is planning to reduce it’s debt, Venezuela keeps growing it’s debt. Production, productivity, competitiveness is going down. There is absolutely no transparency regarding BCV Venezuela financial situation.

    The infrastructure in Venezuela is deteriorating quickly. The production of the principal industries is going DOWN, there are shortages in everything that government produces or tries to produce, and this include agriculture. They have also shortages in qualified personal.

    All this is reflected in the annual reports of state secretaries/companies.

    So Rudy, let’s wait for five years. Wanna bet?

  15. HalfEmpty Says:

    LOL Rudy, that’s good.

  16. How many US banks went bankrupted since the end 2008,more than 200, 60 % of US debt belongs to China, this site is existing by US means altough the financial problems in the US are much bigger than thouse in Venezuela, look for instance the medicare and medicaid that is cut for 4.4Trillion Dollars, is it like the pot and the kettel?

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