Central Bank of Brazil: Public or Private? The ambivalence of the Central Bank of Brazil and the ballast for currency issuance

Abstract

The Central Bank in Brazil is an autarky of the federal government that has a monopoly on currency issuance. In most developed countries the central bank is privately owned. But in Brazil and other countries with late development the central bank is public. However, public central banks operate much the same way that private banks do, in particular as regards the currency issuance that, through legal artifices, is a private monopoly in most of the world. This study aims to analyze this public and private dichotomy, from the analysis of the legal protection of the currency issue in Brazil. At this point we conclude that there is evidence that indicates that the degree of independence that the Central Bank of Brazil acquired is related to pressures from economic elites (who benefit from public debt bonds) on political elites.