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A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may fail in the near future. In other words, it is when, in a fractional-reserve banking system, numerous customers withdraw cash from deposit accounts with a financial institution at the same time because they believe that the financial institution is, or might become, insolvent. When they transfer funds to another institution, it may be characterized as a capital flight. As a bank run progresses, it may become a self-fulfilling prophecy: as more people withdraw cash, the likelihood of default increases, triggering further withdrawals. This can destabilize the bank to the point where it runs out of cash and thus faces sudden bankruptcy. To combat a bank run, a bank may acquire more cash from other banks or from the central bank, or limit the amount of cash customers may withdraw, either by imposing a hard limit or by scheduling quick deliveries of cash, encouraging high-return term deposits to reduce on-demand withdrawals or suspending withdrawals altogether.
Banco Santander S.A. trading as Santander Group, is a Spanish multinational financial services company based in Madrid and Santander in Spain. Additionally, Santander maintains a presence in most global financial centres as the 19th-largest banking institution in the world. Although known for its European banking operations, it has extended operations across North and South America, and more recently in continental Asia. It is considered a systemically important bank by the Financial Stability Board.
"Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and therefore should be supported by government when they face potential failure. The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois. The term had previously been used occasionally in the press, and similar thinking had motivated earlier bank bailouts.
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Banco de Venezuela is an international universal bank based in Caracas. It was the market leader in Venezuela until 2007, when it fell to third place, with an 11.3% market share for deposits; its major competitors are Banesco, Banco Mercantil and BBVA Banco Provincial. As of June 2008, it had 285 branches in Venezuela.
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Victor Vargas is a Venezuelan banker and businessman, best known for being the former owner and president of the now defunct 14th largest private bank in Venezuela, Banco Occidental de Descuento.
Gustavo Adolfo Gómez López is a Venezuelan lawyer, banker and businessman of Spanish ancestry. Founder of the law firm Gómez López & Asociados, he was president of Banco Latino and its group of companies until 1994. Currently, he practices his profession and is a member of the boards of directors of several media outlets and insurance companies.
References
- 1 2 3 BusinessWeek , 14 June 2010, Venezuela Seizes Banco Federal for ‘Grave’ Weakness (Update2) Archived July 22, 2010, at the Wayback Machine
- ↑ The Wall Street Journal , 14 June 2010, Venezuela Bankers Seek To Reassure Public After Bank Seizure
- ↑ El Universal, 19 August 2010, New law prohibits media owners from holding shares in banks Archived 2012-07-11 at archive.today
