Brazilian Loans Research Articles

Market Power and the Transmission of Loan Subsidies

Abstract We study a large-scale Brazilian loan subsidy program to expand long-term credit. The government subsidizes banks’ funding costs for lenders, who then allocate credit to firms at regulated interest rates below a maximum ceiling. We propose and test a mechanism allowing banks to circumvent the rate caps and capture part of the subsidy. We show that when issuing a subsidized loan, lenders with market power use a cross-product pricing strategy, whereby they increase the price of other products to the same client. Our results have important policy implications for the design and effectiveness of government interventions in credit markets. (JEL G21, H81, E43) Received: 15 March 2023; Editorial decision: 13 April 2024 Editor: Robert Marquez

The fall of the house of Speyer: the story of a banking dynasty

IntroductionEarly DaysENGLANDThe London Tube / English Philanthropy / The House of Music / The Scott Expeditions / Leonora / Influence on the Liberal Party / Anti-Germanism and Its ConsequencesAMERICAMediation Efforts / Ellin / U.S. Railway Promotions / Cuban Loans / Philippine Railroads / Mexican Railroads / Brazilian Loans / Industrial and Municipal InvestmentsGERMANYRehabilitating Central Europe / Last Days in GermanyEpilogue: James Speyer Kronthal

Competition in the Brazilian loan market: an empirical analysis

The aim of this paper is to review some of the existing tests for competition in Brazilian banking, as well as to propose an alternative. After the description of the institutional setting of the Brazilian Banking system on this period, the competition tests on the literature were reviewed, beginning with the test proposed by Panzar and Rosse (1987). The market does not seem to be in long-run equilibrium, implying only the market does not seem to find itself in collusive outcome. The next step was to try a new methodology, applied by Moreno, Martínez and Ruiz (2006) for the Spanish banking market. On this methodology, in which the assumption of equality of conduct parameters between firms and time periods is relaxed, the results indicate that, for some firms and in some time periods, a cooperative conduct in fact is present.

Brazil as a debtor, 1824–19311

SUMMARYInternal rates of return of Brazilian loans floated between 1824 and 1931 fell below those of British and US government consols and bonds only for some of the loans floated after the beginning of the twentieth century. Higher volatility of yearly rates of return was rewarded by higher returns for all Brazilian Federal loans. Their spreads over consols in 1824–1943 are compared to those of Argentina and Chile and of Brazilian state and municipal loans for 1888–1930. In spite of some deterioration over time, Brazilian loans had a better performance than suggested by the literature, especially in the 1920s.

The relationship between the Brazilian interest payments moratorium and bank equity returns: evidence from the London Stock Exchange

This study examines the effects of the Brazilian interest payments moratorium announcement on the equity return levels of several large US and European commericial banks traded on the London Stock Exchange. The empirical evidence suggests that, in general, the equity prives of the sample banks immediately reflected the relevant information associated with the announcement. However, some degree of pricing inefficiency was determined to exist, as the market was unable to discriminate among banks of the basis of exposure to Brazilian loans.