Your banks too, Comrade?

October 16, 2008

Isn’t it enough that global capitalism is collapsing?  Did Bolivarian socialism have to take a hit too?  The Financial Times is reporting that Venezuelan banks are particularly exposed to the US-based credit crisis.  Venezuelan banks were holding $400 million of “structured notes” guaranteed by the now-defunct bank Lehman Brothers.  And in an extra blow to Hugo Chavez’s pride, the Treasury itself had an additional $300 million worth.  Thus despite the intricate capital controls and exchange controls which cosset the Venezuelan financial sector from international swings, there has been increased fear in the market that Venezuela’s banks are facing a major crisis.

It wouldn’t be surprising, of course, if Chavez used the opportunity to increase the state’s stake in the banking system, seeing as his administration has  pursued a number of nationalisations of key industries (telecoms, communications, energy, etc).   But for once, Chavez’s nationalisation policy, rather than seeming like a socialist aberration in a free-market world, would fall safely within the mainstream.  Even the governments of the UK and US, the prophets of market capitalism, have taken over parts of their financial system in the wake of the credit crisis.

As a colleague at LSE joked yesterday, it seems that for left-wing politicians, what globalisation taketh away, globalisation giveth.  As a student in the 60s and 70s, Gordon Brown might have dreamed a  dream of a nationalised banking sector; a dream which was made untenable by the Labour Party’s march into modernity, globalisation and market capitalism under the leadership of Tony Blair.   And now, imagine the joy!  Gordon Brown got to nationalise the banks!  You have to wonder if in private, as he pours over the books of the Royal Bank of Scotland, he’s smoking a fat Cuban cigar and wearing a Chavez-esque red beret.

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One Response to “Your banks too, Comrade?”

  1. […] was the financial and political risks that these funds posed to their home country.   I’ve already commented on the impact that the current financial crisis is having on Venezuelan investments in western […]

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