Brazil expands securities to free reserves

Thu Oct 16, 2008 10:07am EDT
(Central bank corrects information on securities accepted in 2nd paragraph to exclude certificate of deposits)
SAO PAULO, Oct 16 (Reuters) - Brazil's central bank on Thursday expanded the list of securities it will accept to free up reserve requirements on term deposits, the latest in a series of measures to add liquidity to the financial system.
Banks can now buy fixed income securities and interbank deposit certificates, among others, from competitors to free up mandatory reserves on term deposits kept at the central bank.
The central bank had previously allowed large banks to buy credit portfolios from small- and medium-sized firms in distress to free reserves, spurring a series of acquisitions of loan portfolios.
Bradesco (BBDC4.SA: Quote, Profile, Research, Stock Buzz), Unibanco (UBBR11.SA: Quote, Profile, Research, Stock Buzz), Banco do Brasil (BBAS3.SA: Quote, Profile, Research, Stock Buzz) and Spain's Santander (SAN.MC: Quote, Profile, Research, Stock Buzz) have all taken advantage of the central bank measures to purchase loan portfolios in recent days.
The measures only apply if banks selling the credit portfolios or the securities have reference stockholders equity of 7 billion reais ($3.2 billion) or less. ($1=2.195 reais) (Reporting by Daniela Machado; Writing by Elzio Barreto; Editing by James Dalgleish)