* Ex-bank chief faces money laundering, other charges
* Liquidation one of biggest Brazil bank collapses in years
BRASILIA Oct 22 Police in Sao Paulo said on
Monday they had arrested the former head of bankrupt Brazilian
lender Banco Cruzeiro do Sul on charges of money
laundering and crimes against the country's financial system and
Last month Brazil's central bank ordered the liquidation of
the bank and its subsidiary, Banco Prosper, after seizing the
lender on June 4 due to fraud-related losses and after
administrators failed to find firm takeover bids.
The liquidation of the bank represents one of the biggest
collapses in the country's banking system in years.
Sao Paulo's Federal Police said in a statement that the
executive was arrested at an apartment building in Cotia, a town
on the outskirts of Sao Paulo city, following an investigation
by its financial crimes unit which began in June.
The police said it would not release the name of the
detained executive. Up until the time of the bank's seizure, it
was headed by chief executive Luis Octavio Indio da Costa.
Analysts said last month when the decision to liquidate
Cruzeiro do Sul was announced, that it was not a threat to the
banking system but might dent confidence in mid-sized lenders
and tarnish the central bank's credibility as sector watchdog.
For background on the Cruzeiro do Sul's collapse,
(Reporting by Bruno Marfinati and Peter Murphy; Writing by
Peter Murphy; Editing by Michael Perry)