BRASILIA, Jan 7 (Reuters) – Brazil’s federal audit court does not have authority to reverse a central bank decision to liquidate lender Banco Master and needs more time to assess whether the liquidation is justified, the court’s head Judge Vital do Rego said on Wednesday.
The court, known as the TCU, is reviewing the central bank’s decision in November to liquidate the mid-sized lender because of liquidity problems and regulatory breaches, but only the Supreme Court could reverse the decision, Rego said in an interview with Reuters.
Markets have been monitoring the TCU and Supreme Court work on the case, as uncertainty grows over investor compensation.
Rego said it was not yet clear whether the liquidation was justified, saying TCU technicians would need to assess central bank documents before reaching a conclusion. He estimated the work would take around 30 days.
Master had grown rapidly through an aggressive strategy built on high-yield debt sold through investment platforms.
(Reporting by Ricardo Brito; Written by Marcela Ayres; editing by Barbara Lewis)
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