President Hugo Chávez’s threat to nationalise Venezuela’s banks may not be completely idle (he has already taken control of the oil, telecoms and electricity sectors this year). But it is unlikely that Venezuela’s president wants – or would be able – to carry it out any time soon.

That is because these privately-owned institutions are playing a key economic role as Mr Chávez advances to put in place his “21st century socialism”. By buying up government debt, banks essentially allow the government to keep public spending high without creating additional inflationary pressure. If the government couldn’t place its debt with the banks, inflation – running at 19.4 per cent over the last 12 months – would probably be much higher.