Special Report:Global Financial Crisis     

    RIO DE JANEIRO, Oct. 22 (Xinhua) -- Brazil's president Luiz Inacio Lula da Silva authorized on Wednesday two state-owned banks, Caixa Economica Federal and Banco do Brasil, to acquire shares of financial institutions which are facing difficulties due to current global financial crisis.

    The acquisitions may be direct or through subsidiary companies. The state-owned banks will be allowed to acquire assets from insurance and financial-services companies as well.

    With the measure, the government aims to rescue banks in case their difficulties threaten the stability of the country's financial market.

    According to Brazil's Finance Minister Guido Mantega, no banks are about to go bankrupt in the country, and Lula's authorization only provides an alternative if things should turn sour.

    The minister assured that both Caixa Economica Federal and Banco do Brasil have the resources necessary to acquire other companies, and will not need any money from the government.

    Besides the acquisition of banks by state-owned institutions, the president also authorized Brazil's Central Bank to swap the country's foreign exchange reserves with other countries' monetary authorities.

    To ensure liquidity in the markets and halt the devaluation of the local currency, the Brazilian government has taken a series of measures including selling part of its foreign reserves and lowering the deposit reserve ratio so that banks can give more credit.

    Brazil has already used 23 billion U.S. dollars from its foreign exchange reserves to fight the effects of the crisis. According to Mantega, the amount is low compared with the sum spent by the developed countries.