Citibank and Venezuela – Perils of Centralized Monetary Systems

The Latin American nation of Venezuela is staring at a far worse economic crisis in the coming days as US-based banking major Citibank intends to close a number of accounts belonging to the Central Bank of Venezuela and other government arms. If the bank indeed closes these Venezuelan accounts, the country will be left without any means to conduct foreign transactions.

As the fears of economic isolation loom over the country, Citibank insists that the decision was taken by an independent risk assessment arm belonging to the bank which considers the country’s failing economy as a threat to the institution. With strict capital controls in place, Citibank has so far been the only corresponding bank responsible for managing all transactions in and out of the country.

There are speculations that the Citibank’s intention to close the Central Bank’s account is motivated by something entirely different than the risk assessment review. The President of Venezuela, Nicolas Maduro in an address equated Citibank’s actions to the imposition of a financial blockade by the United States using Citibank as a tool. It is also worth noting that the Venezuelan government had last year organized a gold swap

Read more ... source: NewsBTC USA