Brazil

Brazil's central bank said on Tuesday it will liquidate the assets of Banco Morada, which it said was insolvent and had violated legal norms, Reuters reported. The central bank, which in April said it would scrutinize the books of the Rio de Janeiro-based bank due to irregularities, said the controlling shareholders had not presented a viable recovery plan. Banco Morada has only one branch, and its total deposits as of December 2010 represented only 0.01 percent of Brazilian financial system assets and 0.03 percent of deposits, the central bank said in a statement.

Brazilian consumer bad debt rose 3 percent in August compared with July, Serasa Experian, Latin America's largest credit bureau, said on Monday, Reuters reported. Compared with a year earlier, August bad debt was 29.2 percent higher, Serasa Experian said in a statement. In the January-August period, bad debt was 23.4 percent higher than the same period a year earlier, Serasa Experian said. Serasa Experian is part of the London-based Experian group, the largest credit bureau outside the United States.

Brazilian policy-makers have fueled their country's economic boom through a state-owned bank that keeps business flush with credit, The Wall Street Journal reported. Now the engine that has helped the nation become a global player in beef, oil and mining is colliding with another policy imperative: battling inflation. The Brazilian National Development Bank, in its latest spur to the economy, last week announced it would lend $1.6 billion at below-market interest rates to help a large company to build a pulp and paper mill.

Small and medium-sized Brazilian lenders will have to merge with rivals to strengthen their capital base and revamp their fundraising structure, central bank director Anthero Meirelles said in a newspaper interview published on Monday, Reuters reported. Smaller financial institutions must "adapt their strategies" to face a more competitive landscape in the industry, Meirelles, the central bank's industry watchdog, told Valor Economico.

Brazil's Central Bank President Alexandre Tombini said on Tuesday that default rates on loans are rising, Reuters reported. Tombini, speaking at a congressional hearing, did not give further details. Consumer credit has risen rapidly in Brazil in recent years, fueling an economic boom, but some analysts have voiced concern that default rates could rise this year as the economy cools and interest rates rise. Read more.

Treasury Secretary Timothy Geithner, on a visit Monday to Latin America's biggest economy, urged Brazilian officials to help the U.S. pressure China to allow its currency to appreciate, The Wall Street Journal reported. Though officials in public shied away from specifics of any plan to coordinate calls for a stronger yuan, a person familiar with the discussions said Brazil and the U.S. may speak with a common voice on the issue in a coming meeting of the Group of 20 major economies.

A bankruptcy judge cleared Lehman Brothers Holdings Inc. to sell its Brazil investment business, Libro Companhia Securitizadora de Creditos Financeiros, for nearly $15.9 million, Dow Jones Daily Bankruptcy Review reported. Judge James Peck of the U.S. Bankruptcy Court in Manhattan, approved of the sale Wednesday to a firm called Jive Investments Holding Ltd. In his order, Peck said that Jive's offer was the "highest and best" available and that the sale was in the best interest of Lehman and its creditors.

Lehman Brothers Holdings Inc. is seeking court approval to sell its Brazil investment business, Libro Companhia Securitizadora de Creditos Financeiros, to a firm called Jive Investments Holding Ltd., Dow Jones Daily Bankruptcy Review reported. Jive, which is based in the British Virgin Islands, will buy Lehman's equity stake and notes in Libro, which maintains portfolios of fixed income, distressed and loan assets. The sale price is nearly $15.9 million, after Jive outbid an unidentified competitor. Lehman is asking Judge James Peck of the U.S.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar, BusinessWeek reported.

The World Trade Organisation is expected to rule on Friday that billions of dollars in European government subsidies for Airbus aircraft are illegal, the Financial Times reported. That would hand victory to the US and Boeing, in the first round of a WTO dogfight between the world’s biggest aircraft manufacturers. The preliminary ruling, is likely to spur Washington to launch a WTO challenge to further government loans for Airbus to develop its new €11 billion ($16 billion, £10 billion) A350 extra wide-bodied airliner which will compete with Boeing’s long-delayed 787 Dreamliner.