Brazilian Financial System Research Articles

Legal and regulatory challenges regarding the governance of the central banks in Brazil and Chile: attributions related to monetary policy, macroprudential and financial stability

Changes in the financial regulation system are the object of reflection in this work, especially those made in Chile and Brazil. Debates around financial supervision and regulation are spreading across the world and also involve the role that Central Banks should have in terms of financial stability or at least the regulation of the banking system, thus questioning the accumulation (or not) of functions and the interface that these functions have with the role of stabilizing inflation and conducting monetary policy that these central banks have. This work aims to evaluate the evolution of recent regulatory aspects of the Brazilian financial system and compare it with the Chilean supervisory structure, where different organizations conduct monetary policy and financial regulation.

The relationship between financial stability and transparency in social-environmental policies

PurposeThis work analyzes, through social-environmental reports, whether banks with higher transparency in social-environmental policies better safeguard financial stability in Brazil.Design/methodology/approachThe analysis is carried out through a panel database analysis of the 42 largest Brazilian banks, representing 98% of the Brazilian financial system. Seeking to avoid spurious results, we followed rigorous methodological standards. Hence, we conducted an empirical analysis using a dynamic panel data model, we used the difference generalized method of moments (D-GMM) and the system generalized method of moments (S-GMM).FindingsThe results show that the higher the transparency of social-environmental policies, the lower the chance of possible stress on the financial stability of Brazilian banks. In sum, this study builds evidence that disclosing risks related to policies about sustainability can enhance financial stability. It is essential to highlight that social-environmental transparency does not have as direct objective financial stability.Originality/valueThe manuscript submitted represents an original work that analyzes whether banks with higher transparency in social-environmental policies better safeguard financial stability. Some countries, such as Brazil, have their potential for sustainable policies spotlighted due to their green territory and diverse natural ecosystems. Besides having green potential, Brazil is a developing country with a well-developed financial system. These characteristics make Brazil one of the best laboratories for studying the relationship between transparency in social-environmental policies and financial stability.

Which banks’ business operations are more risky? The impact of leverage on Brazilian financial institutions

We analyse the effect of leverage components and banks’ ‘business model channels’ on risk-taking for Brazilian banks. Using a detailed dataset from the Brazilian financial system, the results show that the measurement of leverage components is relevant for determining banks’ risk. We highlight two important findings. First, we provide novel insights for the design of a generalised method of moments (GMM) estimation using external instruments. Second, the derivative and on-balance-sheet operations are risky for investment and foreign banks. These results provide important information for banking supervision and regulation and bring new insights regarding banks’ leverage behaviour.

A Brief History of the Brazilian Financial System: From the 19th Century to the Current Dynamics of Financialization and Concentration

A Brief History of the Brazilian Financial System: From the 19th Century to the Current Dynamics of Financialization and Concentration

What do we know about the relationship between banks’ risk measures and social-environmental sustainability transparency?

Concerns regarding social and environmental issues have become a pervasive aspect of economic relationships, prompting banks' role in social-environmental sustainability to occupy a growing share in the economic debate. Nevertheless, what is the relationship between bank behavior and sustainable activities? This paper presents the relationship between the disclosure of social-environmental policies and bank risk tolerance using a newly developed Social-Environmental Transparency Index for financial institutions. Using a dynamic panel database analysis of the 42 largest Brazilian banks, which represent about 98 percent of the Brazilian financial system, we estimate the impact of risk-taking by banks on their social and environmental transparency. The results indicate that safer banks have greater social-environmental transparency, and banking social and environmental regulation is important in increasing the sector's transparency. Finally, social-environmental disclosure has a persistent effect. Thus, transparent banks tend to be more transparent over time.

La Resolución 4.327/2014, del Banco Central de Brasil, en el escenario de las cooperativas financieras brasileñas

El sistema financiero brasileño fue instituido por la Ley 4.595, del 31 de diciembre de 1964. En el núcleo de su estructura normativa, el Banco Central de Brasil compone el subsistema normativo. Para mantener la conexión de las instituciones financieras con el compromiso del desarrollo sostenible, el Banco Central de Brasil editó la Resolución 4.327/2014, determinando que la obligación de las instituciones financieras implementar políticas de responsabilidad socio ambiental. En este contexto, las cooperativas financieras, sumisas a las reglas del sistema financiero brasileño, tienen en los valores y principios cooperativos una herramienta adecuada a la promoción de la responsabilidad socio ambiental.
 Recibido: 16 abril 2018Aceptado: 18 mayo 2018

Influência da crise financeira de 2008: uma análise sobre a tecnologia da informação dos maiores bancos do consolidado financeiro brasileiro (2001-2016)

Este artigo tem por intuito analisar os efeitos da tecnologia de informação (TICs) sobre a funcionalidade no sistema financeiro brasileiro baseando-se na abordagem Pós-Keynesiana e Neo-Schumpeteriana. A partir da abordagem Pós Keynesiana, buscou-se identificar as contribuições das TICs nos fatores de produção no sistema bancário, como a seleção de variáveis estratégicas dos bancos brasileiros no período de recessão. Por intermédio da metodologia de análise de dados em painel , durante os anos de 2001 a 2016, obteve-se resultados que captaram os efeitos e a repercussão da crise de 2008 sob o sistema bancário brasileiro. A partir dos principais resultados da estimação observou-se que o valor da sensibilidade das inovações financeiras foi superior ao fator de produção trabalho e, durante o período, a criação de inovações financeiras representou maior relevância quanto aos aspectos da redução de custos pelas instituições financeiras brasileiras sob análise.

The Brazilian Financial System, Cyber Security Policy and Personal Data Protection

Purpose ”“ This work intends to map and analyze, through the polycentric regulation proposal introduced by Julia Black, the contribution of the actors involved in the creation of the data protection regulatory legal regime in financial system, after the introduction of the cyber security policy by the Central Bank of Brazil, the approval of the General Data Protection State and new financial business models.
 Methodology ”“ It first analyses the regulatory and statutory norms associated with data protection in the financial system, combined with the cyber security policies published by financial institutions. After this, it identifies the actors who contribute to the regulatory environment and their respective regulatory role. The final step is the creation of a table to categorize each actor’s functions in the regulatory regime.
 Findings ”“ The research concludes that the contracts between financial institutions and technology play a major role on creating and hybrid regulatory environment for data protection.
 Originality ”“ The work is an original analysis of the data protection regulatory legal regime in financial system, using polycentric regulation not only as a theoretical reference, but also as a methodological framework.

Um Olho no Peixe e Outro no Gato: Como as Fintechs Disputam Espaço com os Bancos em Época de Juros Baixos

Este caso de ensino contextualiza a evolução e transformação do Sistema Financeiro brasileiro, com destaque para o crescimento das fintechs (empresas financeiras de base tecnológica)e ruptura do momento de “sossego” dos grandes bancos. Com o surgimento das fintechs, o market share dos grandes bancos passa a ser ameaçado. Com isso, este caso tem por objetivodiscutir as estratégias de mercado concorrenciais dos bancos e das fintechs frente aos cenários futuros possíveis, sobretudo, analisar as estratégias das fintechs com enfoque nas atividadespolíticas corporativas sob forma de influenciar o governo, a regulação e o Sistema Financeiro Nacional para obter acesso ao mercado. O caso ainda permite avaliar a integração das estratégiasde mercado e de não mercado, atuando frente a um interesse em comum, entre as fintechs e os grandes bancos. Trata-se de um caso real dentro do contexto brasileiro. Pode ser utilizado em cursos de graduação e de pós-graduação em Administração, Ciências Contábeis, Economia e Gestão. Ainda pode ser utilizado em cursos complementares, de curta duração ou educação executiva, em temáticas tais como Relações Governamentais e Relações Institucionais e Estratégia de Não Mercado.

Developmental State with Neoliberal Tools: A Portrait of the Brazilian Housing Financial System

Abstract In the last decades, several countries have undertaken institutional reforms in their national housing finance systems (SFH). At the end of the 1990s, the Brazilian government followed this global trend and reformed its national SFH. In 1997, Congress enacted Law no. 9.514, instituting the Real Estate Financial System (SFI) that should gradually replace the former SFH. The new SFI sought a different model of financing based on the creation of a mortgage market, which consisted of securitizing debts and fundraising via the capital market. In contrast, the former SFH was a state-led arrangement that relied on direct credit policies, public subsidies and the performance of state-owned banks. This paper aims to assess the Brazilian housing reform outcomes. Regarding legal security, the data collected pointed to the satisfactory success of these measures. However, concerning the extent to which the market relation expanded over the state domains, the achievement is different. The most apparent effect of the reform is a repositioning of state agents in the new institutional frameworks, most notably the state-owned bank in the housing market.

Modelo de Defasagem Distribuída Polinominal para Teste de Estresse do Sistema Financeiro no Brasil

Este estudo objetiva propor um modelo de defasagem distribuída polinomial para prever a inadimplência do sistema financeiro brasileiro com base em variáveis macroeconômicas. O modelo estima coeficientes que consideram efeitos defasados das variáveis explicativas na inadimplência. Os modelos mais comumente utilizados em testes de estresse (regressão linear, séries temporais e dados em painel) não consideram que a mudança em uma variável tem um efeito distribuído pelos períodos posteriores. O modelo foi estimado para o período de janeiro de 2004 a fevereiro de 2016, em que a inadimplência foi prevista em função de variáveis macroeconômicas relacionadas a taxa de juros, produção industrial, desemprego e o índice Ibovespa de ações. O modelo proposto apresentou menor erro de estimação que os modelos mais comumente utilizados na literatura, indicando que é sua utilização é mais adequada.

Macroprudential policy debate, concepts and the Brazilian context

<div class="page" title="Page 1"><div class="layoutArea"><div class="column"><p><span>The economics literature related to the financial system seeks to define the concepts of financial stability, systemic risk and macroprudential instruments for the purpose of drafting a policy that essentially "leans against the wind", that is, a policy that monitors macroeconomic vulnerabilities and combats system instability. Such a policy should cover all financial institutions involved in credit intermediation (not just banks) and consider the pro-cyclical and intrinsic nature of risk in the financial system, and account for the spillovers effects of policies in other countries, that is, the global context. This article summarizes the main concepts related to macroprudential policy discussed in the economics literature after the crisis the 2008 financial crisis. In addition, we describe macroprudential policy in the context of the Brazilian financial system, specifically major policies implemented in the banking regulatory environment related to Basel III and non-bank regulations related to shadow banks. After the 2008 crisis, Brazil was one of the precursors countries in operating macroprudential instruments to curb excessive credit growth and strong capital inflows. The Brazilian financial system has a broad regulatory perimeter, adhering to international standards and covering the Shadow banking system. This system has a weak connection with the banking system and is small relative to the financial assets of the national and global systems. </span></p></div></div></div>

As Instituições Financeiras Brasileiras Usam a PCLD para Gerenciamento de Capital?

Este estudo teve por objetivo verificar se as instituições financeiras brasileiras utiliza a parcela discricionária da Provisão para Créditos de Liquidação Duvidosa (PCLD) como instrumento de gerenciamento de capital. Para esse propósito, foram analisados os dados trimestrais de 2000 a 2015 dos 50 maiores conglomerados e instituições financeiras com atuação no Sistema Financeiro Nacional (SFN). Na realização dos testes empíricos foram estimados modelos com uso de dados em painel com efeitos fixos seccionais, sendo consideradas duas variáveis representativas do nível de capital: o Índice de Basileia, medida regulamentar de requerimento de capital; e uma proxy baseada em informações contábeis. A discricionariedade no reconhecimento da PCLD, por sua vez, foi definida como o valor provisionado para perdas acima do mínimo estabelecido na Resolução CMN nº 2682 (1999). Os resultados dos testes revelaram que não há evidências de que os bancos brasileiros utilizem a discricionariedade na constituição da PCLD para fins de gerenciamento de capital. Por outro lado, reforçaram as evidências de estudos anteriores, nacionais e internacionais, sobre o tema, no sentido de que as instituições utilizam essa discricionariedade na PCLD com o propósito de gerenciamento de resultados. Mesmo quando aplicado sobre as instituições financeiras consideradas “menos” capitalizadas, os testes também não confirmaram a hipótese de gerenciamento de capital. O estudo contribui para as discussões em curso no âmbito dos reguladores contábeis e bancários sobre o modelo atual de provisão para perdas de crédito.

AS MUDANÇAS NO SISTEMA FINANCEIRO E AS ESTRATÉGIAS DA AÇÃO SINDICAL: O CASO DO SINDICATO DOS BANCÁRIOS DE SÃO PAULO

Resumo O artigo analisa a atuação do Sindicato dos Bancários de São Paulo durante os anos 2000 para a manutenção de sua representatividade e legitimidade em um contexto em que a financeirização do capital reconfigura a categoria dos bancários e coloca crescentes desafios às formas de ação coletiva. O artigo contextualiza as mudanças recentes no sistema financeiro brasileiro e identifica suas consequências sobre o perfil do bancário. Finalmente, analisam-se as estratégias adotadas pelo Sindicato que, apesar de lograrem dialogar com os interesses imediatos dos trabalhadores, tenderam a dificultar a universalização das demandas.

Insolvency and contagion in the Brazilian interbank market

This paper proposes a new way to model and analyze contagion in interbank networks. We use a unique dataset from the Brazilian financial system and include all active financial intermediaries. We show that the contagion chain has a short propagation path. We find that first-round contagion is generated only by banks and that medium-sized banks can generate contagion, which implies that size is not the sole determinant of importance within networks. Most vulnerable financial institutions are not banks. Finally, we compute a lower bound for the financial system expected losses in a 1-year horizon. The results contribute to the development of a financial stability-monitoring toolkit.

CARACTERIZAÇÃO DAS APLICAÇÕES DE CRÉDITO RURAL E DOS FINANCIAMENTOS À PECUÁRIA LEITEIRA NA REGIÃO OESTE DO ESTADO DO PARÁ

SUMMARY: The article evaluates the profile of rural credit with emphasis on dairy farming financing in the municipalities of the western region of the state of Para. The data were collected from secure sources of the Brazilian financial system and field survey including 176 farmers from the Municipalities Itaituba, Ruropolis, Trairao and Placas. The results showed that the farmers’ level of access to rural financing has shown strong instability during the last two decades. During recent years a predisposition to new investments in dairy farming has been observed due to new commercialization opportunities and an increase in the number of dairy products. For the next few years, it is recommended that funds from rural credit be directed toward investments in genetic improvement of the dairy herds, pasture management, mechanization and milking hygiene, in order to aggregate value and quality to the milk supplied to the market.

Restructuring Brazil's National Financial System

This work focuses the recent development of the Brazilian Financial System and its institutions. It initially presents an overview of the credit market in the post-Real Plan period. After stabilization, financial institutions had to be completely reformed. A very conservative and successful regulatory framework was created to avoid the permanent instability of the past. The paper also analyses the impact of the rapid credit growth after 2004 and the role of state-owned banks to compensate the impact of the international crisis of 2008. It is important to note that the process of formulation and implementation of the financial market reforms was not the result of a previous strategic planning, but a response based on the past experience of the internal and external crises and the political opportunities, which were created after 1994.

Financial System, Innovation and Regional Development: The Relationship between Liquidity Preference and Innovation in Brazil

This paper discusses the Brazilian financial system and the impact of liquidity preference on regional development in Brazil. In the Post-Keynesian literature, endogenous money is introduced into economic activity through the credit provided by banks. The degree to which banks exhibit lower or higher liquidity preference is crucial to this process. Here we estimate the effect of liquidity preference and other financial variables on the number of Brazilian states' patents, in order to gauge the importance of the bank system to technological progress and regional development.

Financial fragility in a general equilibrium model: the Brazilian case

This paper employs a general equilibrium approach to model the Brazilian financial system. We show that the model is able to replicate the main characteristics of the data and to predict short-term trends. We calibrate the model for the years of 2002–2006, which comprise a crisis period in Brazil’s financial system. Empirical results suggest that the financial system is improving in terms of financial stability over time. Furthermore, the model has been proven useful to model the Brazilian banking system and could be employed to evaluate the impact of changes in financial regulation on the banking system.

Bye, bye financial repression, hello financial deepening: The anatomy of a financial boom

Since the conquest of hyperinflation, with the Real Plan, in 1994, the Brazilian financial system has grown from early infancy to late adolescence. We describe the process of maturing with emphasis on the defining features of the Brazilian financial system over the last 20 years: (1) stabilization and the subsequent financial crisis; (2) universality of banks; (3) market segmentation through public lending; (4) institutional improvement. Further paraphrasing Diaz-Alejandro (1985) , we raise some hypotheses on why, this time, the financial boom has not (at least yet) turned into a financial crash.