INTERNATIONAL BRIEFING
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BANKING
Brazilian Banks Propose Merger
Brazilian banks Itau and Unibanco said they plan to merge, a deal that would create South America's largest private-sector banking group with combined assets totaling $261.4 billion.
The deal must be approved by Brazil's central bank. It was not clear when a government decision would be made.
The banks did not give a value for their all-stock transaction, but Sao Paulo-based consultancy Economatica estimated the combined banks would have a market value of $41.3 billion, eclipsing Brazil's state-owned Banco Brasil and the publicly traded Banco Bradesco.
Germany to Assist Commerzbank
Commerzbank will get up to $29.6 billion in German government help to boost its capital in a deal, called a "silent participation," that does not give the government a stake in the bank.
Commerzbank, Germany's second-largest bank by assets, said it would get a $10.5 billion credit line from the government's stabilization fund. The government will also guarantee up to $19.4 billion in Commerzbank's debt to offer additional funding options.
INDIA
Union Carbide Lawsuit Reinstated
A lawsuit against Dow Chemical's Union Carbide unit stemming from the 1984 chemical leak that killed thousands in Bhopal, India, was reinstated by a U.S. appeals court.
The U.S. Court of Appeals in New York said a trial judge who dismissed claims in 2006 and 2007 didn't give the plaintiffs enough notice to respond to a dismissal bid by the company.
H. Rajan Sharma, a lawyer who represents the plaintiffs, said the decision enables the plaintiffs to conduct discovery to determine Union Carbide's role in groundwater contamination.
AUSTRALIA
Central Bank Cuts Key Rate
Australia's central bank cut its benchmark interest rate early today by a bigger-than-expected three-quarters of a percentage point amid growing signs that the economy is slowing quickly.
The overnight cash rate target was dropped to 5.25 percent from 6 percent. The move came on the heels of last month's 1 percentage point reduction. Most analysts had expected the bank to cut rates by half a point.
Falling house prices and retail sales have spurred the Reserve Bank of Australia's most aggressive round of rate cuts since the economy was last in a recession in 1992. The United States, South Korea and Japan each cut borrowing costs in the past week.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.
