The 1994 banking crisis occurred in Venezuela when a number of the banks of Venezuela had to be taken over by the government. The first to fail, in January 1994, was Banco Latino, the country's second-largest bank. Later, two banks accounting for 18% of total deposits (Banco Consolidado and Banco de Venezuela) also failed.[1] On 9 August 1994, Banco de Venezuela became the tenth bank bailed out by the Venezuelan government during the crisis, with the government taking a majority stake for an estimated at US$294m.[2] In total, between January 1994 and August 1995 17 of the country's 49 commercial banks, as well as some subsidiaries, failed - representing 53% of the system assets.[3] Estimates of the total cost of the bailout range from 18 to 31% of GDP;[4] one estimate gives the total cost of the bank bailouts as 1.8 trillion Bolivars, or $12bn.[1]
Financial liberalisation in the early 1990s and lax banking supervision had laid the seeds for the crisis, which was then triggered by the cumulative effects of a collapse in the oil price, which led to sharply reduced government spending and weakened the Venezuelan economy.[1]
Ruth de Krivoy, who was President of the Central Bank of Venezuela at the height of the crisis in 1994, later published a book on the episode.[5]