CARACAS, Wednesday April 01, 2009 | Update
Rafael Caldera took office for the second time in the midst of a real political, social and economic turmoil. Foiled coup attempts in 1992, together with an unstable government under President Carlos Andrés Pérez, paved the way for transition times that turned out to be standing emergency. By then, the head of state pardoned Hugo Chávez and all the military officers involved in the revolts
The intervention behind closed doors of Banco Latino spread panic among account holders and unleashed a sweeping financial crisis that marked this and upcoming periods File Photo: Andrés Mata Foundation / José Cohen
Since late 1993, the economic good standing of Banco Latino,
one of the major entities in the banking sector, with an extensive
network of branch offices and high profile among account holders,
was the target of widespread rumors.
The bank was subject to nonstop withdrawals of placements and closings of accounts. This caused its intervention and started a serious financial crisis that signaled Rafael Caldera's second term in office.
A Higher Superintendence Council was created. It was crewed by Ruth de Krivoy, the president of the Central Bank of Venezuela (BCV); Carlos Rafael Silva, the Treasury Minister; Roger Urbina, the Banks Superintendent, and Esperanza Martinó, the chair of the Deposit Guarantee and Bank Protection Fund (Fogade). People paid careful attention to the talks held at the BCV. After long discussions in search of an alternative, they made a decision to intervene the second largest bank in Venezuela. The Board of Directors was dissolved and a supervising board was named.
Account holders panicked. Thousand people took the streets and rallied on a daily basis in front of the bank's head offices, trying to recover their savings. Experts regarded the state move in form of intervention behind closed doors as one of the fundamental causes, together with the feeble conditions of other banks, of additional bank runs. A strong systemic crisis during the subsequent months finally resulted in further intervention and the eventual winding-up of most of the domestic banking.
Reopening of the Banco Latino failed to prevent the earthquake that marked the domestic economic performance the following years. At the end, the bank could not stay afloat.
The government of President Rafael Caldera, who had criticized many of the decisions made under President Carlos Andrés Pérez, could not remove some measures, such as the VAT. However, it tried to lessen the tax impact by exempting retailers, amidst protests and appeals to civil disobedience.
Further, in Rwanda, clashes among the Tutsi ethnic group in office and the Hutus, most of them farmers, were more and more severe. Land shortage and a broken country, among others, caused a bloodshed perpetrated by the Hutu forces, called Hunt the Tutsis. The history recorded over 800,000 deaths.
In a spectacular chasing elsewhere, the police captured in Los Angeles US actor and soccer star O.J. Simpsom. He was accused of stabbing his wife, Nicole Brown, found dead beside Ronald Goldman.
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