Economy
From December 2008 to November 2009, the Banks Superintendence found inconsistencies in the source of funds, insolvency and innumerable breaches of rules, unleashing an arsenal of administrative measures in advance to the takeover of banks Canarias, Confederado, Bolívar and Banpro.

However, along this period, the State money continued flowing smoothly to the treasuries of the entities owned by Ricardo Fernández Barrueco, to such an extent that ending October 2009, deposits amounted to USD 2.25 billion, or 18 percent of all the deposits made by public agencies in private banks.

In other words, public sector deposits in these four banks account for 25 percent of the State money held in government-owned banks, namely: Venezuela, Banfoandes, Industrial, the Bank of Treasury and the Agricultural Bank.

Laying the table
As a matter of fact, the numbers which uncover deposits in savings, checking and fixed term accounts are rather conservative, as they do not include the wealth of cash disbursed by public agencies through fixed term deposits known as "money desk."

Banco Canarias is an illustrative case. Including money desk operations, public agencies deposits ending October 2009, grew from USD 967,326,483 up to USD 2.17 billion, that is, 41.52 percent out of the whole funding.

At December 31st, 2008, Banco Industrial de Venezuela, Banfoandes, the Municipal Institute for People's Credit and the Bank of Treasury had two-day deposits in Banco Canarias for USD 235,648,757.

As of June 2009, the item "other fixed term deposits" mirrored an input of around USD 167,520,602, mainly belonging to the Integrated National Customs and Tax Administration Service (Seniat) and the Institute for Prevention and Social Assistance to Employees of the Ministry of Education and Sports (Ipasme).

Ending the first half of 2009, the Bank of Treasury, Banco del Tesoro, Banco de Comercio Exterior and Banco Industrial held USD 383,570,849 in Banco Bolívar through the money desk.

On that same date, Banfoandes, through loans in the overnight market, where financial entities borrow each other, injected USD 125,243,815 into Banco Bolívar.

A recent report of Faraco & Asociados found that the deals at that market, continuously visited by the banks property of Fernández Barrueco spiralled.

As of September 2009, the cash traded in the overnight market accounted for 7 percent of all the funds managed at the financial system, quite a high level.

The Central Bank of Venezuela (BCV) had warned against the continued use of the overnight market. On January 14th, 2009, the Banks Superintendence conceded in an official statement that the BCV had notified it that Banco Canarias "consistently showed in December 2008 a liquidity deficit of approximately USD 262,246,736, as a result of high reliance on official deposits and demand of funds through overnight loans."

In the case of Banco Confederado, "at December 31st, 2008, fixed term deposits and funding as overnight from the public sector stand for 56.18% and 41.06%, out of other funding."

Banpro's accounts as of June 2009 also showed substantial deposits through the money desk from Bandes, Banco Industrial de Venezuela, the Municipal Institute for People's Credit of Bolívar Municipality, Bank of Treasury and Bank of Export and Trade.

No matter if top government authorities were keenly aware of the lack of good standing of the four banks recently seized; public agencies kept on making deposits anyhow.
vsalmeron@eluniversal.com

Translated by Conchita Delgado

Víctor Salmerón
EL UNIVERSAL