Brazil lower house approves bank purchase law

Wed Nov 12, 2008 3:00pm EST
BRASILIA, Nov 12 (Reuters) - The lower house of Brazil's Congress approved a bill on Wednesday that will allow two state-controlled banks, Banco do Brasil (BBAS3.SA: Quote, Profile, Research, Stock Buzz) and Caixa Economic Federal, to buy stakes in troubled financial institutions.
The bill, which still requires approval by the Senate, is one of several government measures aimed at minimizing the impact of the global financial crisis on Latin America's largest economy.
If approved, the law would expire at the end of 2011.
In October, the government gave the central bank the authority to acquire loan portfolios of small and mid-sized banks in distress.
The central bank has also sold dollars in the spot market and carried out foreign exchange swap auctions to help ease the scarcity of U.S. dollars in domestic markets.
(Reporting by Fernando Exman; Writing by Ana Nicolaci da Costa, Editing by Chizu Nomiyama)