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Here’s a quick news round up, about the largest merger in the Brazilian banking history. Itau and Unibanco have announced a joint-venture yesterday creating the largest bank in Latin America – arguably the first major banking player in Latin America – combining about $260 billion in assets. The new Itau-Unibanco has also already announced investments in Mexico, Colombia and Peru. The press in Brazil has welcomed the merger, seen as a good timing to make the country’s financial system more solid to face tough times.

From The Wall Street Journal: “Brazil’s central bank recently announced a $50 billion program of currency swaps to keep financial institutions operating amid the credit squeeze. “This concentration will help strengthen the local financial system,” Finance Minister Guido Mantega told reporters in Brasilia.”

Washington Post: 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.

Financial Times: “This operation takes place at a time of great changes and opportunities in the world, particularly in the financial sector,” they said, adding that Brazil’s banking industry was “in a privileged position, with enormous potential to improve its situation even more in relation to the rest of the world”.

The New York Times: “Whoever says the entire world needs to deleverage hasn’t paid attention to what’s happening in Brazil. Banco Itaú’s $15 billion takeover of a rival, Unibanco, should change that. The deal, announced Monday, creates Latin America’s biggest financial institution, which may become one of the few bright spots in the global banking firmament.”

AFP: “Together, Itau and Unibanco will have assets of 575 billion reais (265 billion dollars) and account for around 20 percent of Brazil’s savings accounts and credit. According to Fortune magazine, Itau made two billion dollars in profits last year from 29 billion dollars in revenues and 168.6 billion dollars in assets. Itau Unibanco would have a “strong international presence,” notably in the countries in the Mercosur trade bloc that comprises Argentina, Brazil, Paraguay and Uruguay, it said.

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The Washington Post today compares the biofuel industry in the US and in Brazil. If on one side the American public opinion is in doubt about ethanol’s green credentials, the tecnology in Brazil has overcome all the obstacle and today produces a greener, cheap alternative to gasoline. The production of ethanol in the South American giant is the most efficient in the world and Brazilians consume more of it than gas.

According to a report released in June by the Organization for Economic Cooperation and Development, ethanol from sugar cane is the cleanest fuel in the world, with its production and consumption reducing emissions of greenhouse gases by up to 90 percent compared with gasoline. The process of transforming sugar cane into ethanol requires eight times less energy than corn.

Unlike corn, which accounts for the bulk of U.S. ethanol, sugar cane is also grown in areas where it is less likely to compete with grains such as wheat or other varieties of maize that are vital to global food supplies. Sugar-based ethanol’s negligible impact on world food supplies is one of the major reasons it has been embraced without controversy in Brazil, even as critics in the United States have assailed their domestic corn-based industry for driving up global grain prices.

Sugar ethanol is also more efficient. The cost of producing ethanol from corn is three times the cost of ethanol from sugar cane. An acre of sugar cane can also yield more than twice as much ethanol as an acre of corn.

Read the article in full here.

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