November 3, 2008 / 3:26 PM / in 11 years

Chavez warns would seize any bank failing in crisis

CARACAS, Nov 3 (Reuters) - Socialist President Hugo Chavez vowed to seize any Venezuelan bank that fails due to the world financial crisis, criticizing the United States and other rich nations for spending to save banks rather than on the poor.

“If here in Venezuela, God forbid, something similar should occur, or even appears set to occur, have no doubt I will not give you bankers even one cent,” Chavez said late on Sunday at a political rally. “I will take your bank away from you. ... I will expropriate your banks.”

Chavez, who calls capitalism an evil and the United States a falling empire, has nationalized swathes of the economy, is taking over one Spanish-owned bank and last year even threatened to nationalize the whole sector.

Chavez says his years-old nationalist policies, such as restricting foreign currency flight, have helped shield the oil-exporting country from the global crisis.

In the mid-1990s, many Venezuelan banks collapsed despite rescue attempts that cost $10 billion. But those failures, prompted tighter regulation that has helped shield the sector from turmoil during this year’s global crisis.

Government bailouts of failing banks have often been unpopular with voters in Latin America.

The United States has set up a $700 billion fund to help failing financial institutions. Other countries have similar but smaller rescue mechanisms. (Reporting by Saul Hudson; Editing by Andrea Ricci)

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