Venezuela Says New Bank Supervisory Law Satisfies U.S. Requirement
Kraus, James R., American Banker
Recently approved Venezuelan banking legislation will bring Venezuela's banking laws into line With U.S. law and clear the way for Venezuelan banks to open offices in the United States, the head of the country's central bank said Thursday.
"We feel that problems have been overcome," said Ruth de Krivoy, president of Banco Central de Venezuela.
"The text of the new legislation sets out clear rules for effective supervision and for complying with international banking standards."
Venezuelan banks were effectively blocked from either opening new offices, or expanding their operations in the United States after Congress approved the Foreign Bank Supervision Enhancement Act in 1991.
U.S. Legal Hurdle
The law required foreign banks requesting approval for U.S. operations to prove they are subject to consolidated and comprehensive supervision by a single home-country regulator. And Venezuela has had no such banking supervisor.
As a result, a number of Venezuelan banks withdrew applications to the Federal Reserve Board to acquire banking operations in the United States.
Two years ago, for example, a consortium of Venezuelan banks and holding companies withdrew an application to acquire Miami-based Eagle National Bank.
Fed sources said the consortium, which included Consorcio Inversionista Bancaracas, Banco Caracas SACA, and Seguros Avila CA, withdrew their application after being told they we unlikely to obtain approval because Venezuelan banking regulators did not supervise bank on a consolidated and comprehensive basis.
Venezuela's President Ramon J. Velasquez signed the revised banking legislation into law earlier this month. It will take effect on January 1.
Ms. de Krivoy said the legislation will bring Venezuelan banking laws into line with internationally accepted rules and regulations and was part of a broader standardization of banking practices around the world.
"It's only logical that the globalization of markets be followed by a standardization in banking legislation," Ms. …