Brazil shuts int'l private banks in crackdown, tightened banking rules and forced several large international groups to close representative offices that offered private banking services in the country illegally.
Brazil shuts int'l private banks in crackdown
Thu Jun 4, 2009 2:52pm EDT
SAO PAULO, June 4 (Reuters) - Brazil's central bank has tightened banking rules and forced several large international groups to close representative offices that offered private banking services in the country illegally, business daily newspaper Valor Economico reported on Thursday.
The move came after Federal Police probes on tax evasion, illegal money transfer and racketeering in past years resulted in the arrest of executives from Credit Suisse (CSGN.VX), UBS (UBSN.VX) and AIG Private Bank in the country, Valor said.
The central bank has ordered the shutdown of all representative offices of banks with subsidiaries in Brazil, the daily said.
Previously, it was common for financial services firms to have domestic subsidiaries with proper banking licenses that were regulated by the central bank, and representative offices that had no oversight because they were not formally registered, and were considered to be operating illegally.
UBS (UBS.N), AIG Private Bank, Merrill Lynch, Credit Suisse and its Clariden Leu unit all closed representative branches in Brazil, Valor said.
Bill Halldin, a spokesman for Merrill Lynch's private banking business in New York, said the firm had not been asked to close anything down in the country.
"We continue to work in Brazil and serve clients and we are looking forward to growing our business," Halldin said.
Credit Suisse said in a statement it closed the representative offices in Brazil in 2008 because of a "strategic decision" and continues to operate in the country through its Credit Suisse Hedging-Griffo asset management unit.
Other banks such as Goldman Sachs Group Inc (GS.N) and HSBC (HSBA.L) have started offering private banking under the umbrella of their subsidiaries in Brazil or merged the representative offices into their universal banks in the country. (Reporting by Elzio Barreto, Editing by Maureen Bavdek) |
