2008-08-08 03:18:01 -

CARACAS, Venezuela (AP) - Venezuela's largest banking organizations said Thursday that the financial system is stable following President Hugo Chavez's announcement that he will nationalize a Spanish-owned bank.
In a statement published in Venezuelan newspapers, the Banking Association of Venezuela and the National Banking Council confirmed that financial operations are proceeding with «normality.
Venezuelan news

reports suggest Bank of Venezuela clients have been withdrawing portions of their savings. But in comments published in the daily El Universal on Thursday, Finance Minister Ali Rodriguez denied that there have been massive withdrawals.
Pointing out that the government could increase the bank's assets by transfering funds, economist Pavel Gomez said that «given the government's level of resources, people don't see a significant risk.
Santander Central Hispano _ a Spanish financial group that purchased the bank in 1996 _ said last week that it is in talks with Venezuela over the future of its subsidiary, which it was planning to sell to a private institution.

Analyst Enrique Alvarez of IDEAGlobal Group in New York said the fact that the negotiations are so cordial has served to lessen the impact on the market.
He said Venezuelan bond prices saw a 1.5 percent drop in a «knee-jerk» reaction. But they haven't experienced continued weakness, «which would have been expected if this was a more confrontational situation,» he said.