Brazil’s Central Bank Faces Court Scrutiny Over Bank Liquidation

Brazil’s central bank is facing extraordinary scrutiny over its decision to liquidate Banco Master SA, a rare instance of judicial intervention that risks undermining the legal certainty of its regulatory decisions.

Both the country’s Supreme Court and Audit Court are seeking details about the move, with the regulator facing a looming deadline to provide information. The liquidation followed months of investigations into Banco Master’s operations and its politically connected Chief Executive Officer, Daniel Vorcaro, who spent about a month in jail before being released with an ankle monitor.

The central bank found evidence suggesting attempted fraud in the ...