Brazilian federal savings bank Caixa Econômica Federal (CEF) has defended its internal practices after its 2bn-real (US$890mn) short-term loan to federal energy company Petrobras (NYSE: PBR) became public last week.
The loan prompted a wave of criticism, including calls from opposition senators for an inquiry. Local newspaper O Globo reported CEF had not followed internal guidelines in the process of granting the loan, failing to consult its auditors.
"This was a unique [loan] operation, including the way it was divulged," the paper quoted Antonio Augusto de Miranda e Souza, president of CEF's auditors association, as saying.
CEF responded in a statement that its chief auditor has a non-voting seat on one of the credit application review committees that approved the loan. The bank also debated the role of auditors in its normal daily operations.
"The auditors do not need to be told before [loan] operations," the federally controlled bank said in a statement. "Their role is to audit operations that have already been completed."
What role government controlled banks will take has been a point of debate as the international financial crisis has deepened. Banco do Brasil (BB) has also granted Petrobras a loan of 751mn reais and both bank are slated to receive additional powers to buy private sector banks and financial institutions with congressional approval of MP 443.
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