Brazil’s government expects the country’s highest court to rule after presidential elections on lawsuits depositors filed against banks to recover losses from state policies to fight hyperinflation in the 1980s and 1990s, according to a person directly involved in the case.
STF, as the court is known, will be cautious as banks may lose as much as 341.5 billion reais ($154.3 billion) in the lawsuits, the person said, asking not to be identified because the court hasn’t yet ruled. Brazil holds elections in October.
The central bank and STF declined to comment by e-mail and telephone respectively when asked about the timing of the decision.
Depositors have been targeting banks in courts for lowering interest rates on their savings accounts during the 1980s and 1990s, a policy the government imposed as a way to fight hyperinflation. An unfavorable decision against banks could deplete their capital and diminish credit, the central bank said in November.
The court in May delayed its ruling for a second time, complying with Attorney General Rodrigo Janot’s request to re-examine documents and recalculate estimates for banks’ gains under the policies.
Janot on July 21 reduced to 21.9 billion reais from 441.7 billion reais his estimates on gross profit banks made from savings accounts from 1987 through 2008, according to a statement from his office. The court’s decision may be affected by the new estimate, the person said. The attorney general’s office sent the new calculation to the STF on July 21.
To contact the editors responsible for this story: Peter Eichenbaum at email@example.com Randall Woods, Robert Jameson