December 01, 2009

Venezuela's government closed four banks Monday, saying authorities uncovered major financial problems after taking over management due to irregularities in their operations.Two of the banks, Canarias and ProVivienda (BanPro), will be permanently closed and their assets auctioned off, Finance Minister Ali Rodriguez said. Most deposits in those banks will be covered by the state deposit insurance fund while the banks are liquidated, he said.

Authorities will try to rehabilitate the other two banks, Confederado and Bolivar, because their financial problems seem surmountable, Rodriguez said.The banks, which account for 5.7 percent of Venezuela's banking sector, were taken over by the government Nov. 20, citing various violations. At the time, officials said the banks would remain open while authorities investigated."The damage caused has been of such severity that it has severely compromised the solvency of those institutions," Rodriguez told state television.