(Adds comments from presidential aides, bank shares’ performance)
By Marcela Ayres and Lisandra Paraguassu
BRASILIA, June 8 (Reuters) - A Brazilian presidential decree raising fines on banks and other companies involved in illicit acts aims to empower the country’s central bank and the securities industry watchdog to boost transparency, Finance Minister Henrique Meirelles said on Thursday.
Speaking in Paris, Meirelles said the decree, which raises fines for banks to as much as 2 billion reais ($610 million) from 250,000 reais, had been under study for some time.
The decree announced this week also would allow the central bank to strike plea-bargain agreements with financial firms that admit breaching the law in exchange for softer fines or more lenient prison terms for their executives.
Two presidential aides, who requested anonymity to speak freely, said the government sped up preparation of the decree because of the risk of new disclosures snaring Brazilian banks in a vast corruption scandal.
An index of financial-sector companies on the Sao Paulo stock exchange fell nearly 1 percent on Thursday.
The central bank is Brazil’s banking and financial industry regulator. A securities industry watchdog known as the CVM oversees the functioning of capital markets. Congress has six months to vote on turning President Michel Temer’s decree into permanent law.
“This certainly gives more power to the central bank and the CVM to implement their measures,” Meirelles said in comments released by the Finance Ministry, without elaborating on the size and scope of the new framework.
The minister’s remarks reflected how senior officials see a series of corruption investigations into cozy ties between politicians and business leaders are evolving so quickly that they require rapid action to fine-tune legislation.
The central bank said in a statement on Thursday that the value of fines in eventual leniency agreements would depend on the gravity of the infractions committed, as well as the size and the financial capacity of a financial institution to bear with such a penalty. The decree is not retroactive, it said.
The decree came as Congress launched an investigation into the stock and currency trades of Brazilian meatpacker JBS SA as news broke of a plea-bargain testimony from its controlling shareholders.
Meatpacking is the latest sector of the economy to be hit by a three-year corruption investigation in Brazil, which contributed to the impeachment of former President Dilma Rousseff last year and now threatens Temer, her successor.
$1 = 3.28 reais Reporting by Marcela Ayres; Writing by Alonso Soto; Editing by Frances Kerry and Bill Trott