Former Central Bank officials claim government is running bank policies

www.vheadline.com Posted: Friday, March 14, 2003 By: Robert Rudnicki

According to former executives at the Central Bank of Venezuela (BCV), the government has taken control of the BCV and it is now "a monetary branch of the government."

In a document signed by 11 former senior BCV executives they claim that the BCV is breaking the Constitution by endorsing government policies. "Monetary policy is now subordinate to fiscal needs and this has led to non-compliance with the Constitution."

Proof of this, the group claim, can be seen on three specific occasions: August 2000 "when the Finance Minister decided to confiscate part of the bank's capital," secondly in October 2001 when the bank's ability to establish reserves were removed from the Central Bank Law and thirdly in November last year when the law was changed because the Treasury needed extra funds.