(Standard protocol letter beginning) I am writing in conformity with the established rules of article 238 of the Decree with Range, Value and Legal Force of the Partial Reform of the General Law of Banks and Other Financial Institutions, in order to instruct you to set aside provisions equivalent to fifty percent (50%) of assets held or established in any type of deed emitted, constituted, backed or guaranteed by Lehman Brothers and Merrill Lynch investment banks or any of their branches, affiliates or connected or related businesses.
The provision referred to in the previous paragraph will be constituted in the lapse of one (1) day from the date of reception of this circular and a certified copy must be sent to this organism and subscribed by the president of this institution, with receipts that show compliance to that instructed here. Said receipts must be accompanied by a breakdown that details the assets subject to the provisionment. In the case that the instituion does not possess the type of asset described it is equally obliged to send to this organization a certificate of the president of said institution that does not prejudice the applicationof the sanctions that would take place in the occasion of non-compliance with the aforemetnioned instructions.
So what does this mean? Does this mean Venezuela is in bigtime hock to the LEH and ML collapses? Does this mean there is panic in the streets of Caracas tonight? Does this mean that Anti-Chávez media will be able to cast doubt on the stability of the country's banking system?
The answers to those questions are 'no', 'no' and 'yes' in turn (and the last one is only a 'yes' cos they'll grasp at any straw available). What's going on here is a smart piece of CYA (cover your ass) from the gov't circle which also allows them to find out something they really want to know (ie how much crap they're going to get splattered with).
This provision is basically asking the bankdudes to write back to the gov't banking ombudsdudes and say, "Don't worry, we're cool and covered dudes" one by one. Those without exposure to LEH and ML toxicity just say so, and those with exposure just say "yep, we have some of that shit but we have the hole covered, no worries, pretty promise."
This then allows the gov't dudes to go to the Chávez dude and say "we have no problem with the toxic fallout from the USofA, H-man, and I have a piece of signed paper to prove it!", which then allows the H-man to go on Aló Presidente this weekend and say "Good news everybody! We're totally free of problems from the Empire's banking collapse, and they've even given me a signed piece of paper to prove it!" (cue applause from people wearing red).
So despite what you might read from the pen of Simon Romero, Andes Oppenheimer or any of their wretched neophytes tomorrow, this is no big deal. And if caca does hit a ventilador and a Venezuelan private bank gets in problems from any future LEH/ML toxic fallout, Hugo's gov't will have a piece of paper that the same troubled bank's topdog signed which will be more than enough for the gov't to be able to say "Aha!! The Capitalist swine lied to us! Throw him in jail!".
So now you know how CYA works in LatAm (not just Venezuela I hasten to add). Any questions?