Brazil to rule cenbank role in bank mergers-report

SAO PAULO, Oct 27 (Reuters) - Brazil's top court may rule as early as this week on the central bank's role in financial sector mergers, in what might be a test to the country's antitrust legislation, O Estado de S. Paulo newspaper said on Tuesday.

The Brasilia-based Supreme Justice Court (STJ) -- the top court for nonconstitutional issues in Brazil -- resumes on Wednesday a trial to decide whether the central bank has full jurisdiction to approve mergers and acquisitions in the financial, banking and securities industries.

A ruling has been expected since 2008, when a regional court gave antitrust agency Cade veto power on Banco Bradesco's (BBDC4.SA) purchase of rival BCN.

But Cade councilors say a decision to grant the central bank exclusive power to veto banking mergers may hamper the independence of regulatory agencies, Estado said. It might also cast doubt over the scope of antitrust laws and whether banks are subject to Brazil's anti-competitive practice regulations, the newspaper said.

STJ Justice Eliane Calmon, who sponsors the case, said in a speech to her fellow court members in September the central bank has "exclusive jurisdiction" on mergers in the financial industry, Estado reported.

According to Estado, the central bank claims that having exclusive oversight in deciding over mergers in the financial sector would allow it to combat more effectively so-called systemic risk. (Reporting by Guillermo Parra-Bernal, editing by Gerald E. McCormick)