Banks, Domestic debt intermediation and confidence crises: the recent brazilian experience
Afonso S. Bevilacqua e Márcio G. P. Garcia

This paper examines the recent evolution of the Brazilian public domestic debt and interprets it in light of the confidence crisis literature. The analysis of the recent developments in the Brazilian public domestic debt market shows that the likelihood of a default must not be assessed only using simple summary aggregate measures of public domestic debt size and maturity, but must also take into consideration other structural aspects. Our analysis emphasizes the two main pillars of the Brazilian public domestic debt market: home-bias and the role of the banking sector in intermediating the debt. Evidence from yields of a “perfectly” indexed bond shows that the rollover premium was very small when the devaluation occurred, and is still fairly small by October, 1999, indicating that the rollover of the public domestic debt has not, so far, constituted a serious problem. Positive prospects for the public domestic debt market will depend, however, on the Brazilian government maintaining the current fiscal austerity program.

Vol.22, n.o4(88), 2002
Macroeconomic trouble and policy challenges in the wake of the financial bust
Angel Asensio

Contrasting with the 1929 great crisis, authorities intervened forcefully in 2008 to stop the disintegration of the financial system. Governments and central banks then sought to revise the prudential regulation in depth. It would be optimistic, however, to believe that prudential measures, alone, could deliver full economic recovery, at least in the countries that had been involved in the financial turmoil. Indeed, the collapse of the 'state of confidence' and the negative effects of private debts on consumption and investment decisions have fed depressive forces and policy challenges which could hold for a while, even once the financial sector is made safe. On the one hand, the economic slowdown and the direct and indirect assistance provided by the governments to the private sectors are having a heavy impact on public finances, meanwhile, on the other hand, the massive amounts of money which artificially inflated the prices of housing and financial products could produce inflationary pressures in the post-crisis period, unless a new assets bubble is allowed for. Authorities could therefore be facing high unemployment in a damaged context of public deficits and inflationary pressures. The paper aims at discussing these new challenges. The inadequacy of inflation targets and fiscal orthodoxy in a depressed economy is emphasized, and the outlines of a Post Keynesian alternative policy are examined.

Vol.31, n.o2(122), 2011
O processo orçamentário no Brasil
Carlos Alberto Longo

Brazil, as well as most Latin American countries, have an inflated public sector, which follows from the expansive government policies pursued until late 70’s, largely financed by external indebtedness. Currently, the lack of transparency and the complexity of public sector accounts hinder the effectiveness of stabilization policies and the productivity of state enterpri-ses. Federal government budget is often balanced, but it does not cover expenditures of the whole public sector. A large amount of subsidies to state enterprises and local treasuries are pro-vided indirectly with federal funds through state banks and monetary authorities. A full-scale bailing out program to alleviate highly indebted enterprises will allow the Central Bank and other financial intermediaries to stop acting as a lender of last resort. In order to fully recover the effectiveness of government policies it is necessary to decentralize national expenditures, grant autonomy to local governments and state enterprises and to minimize their financial mu-tual dependence.

Vol.11, n.o2(42), 1991
Liquidez dos haveres financeiros e zeragem automática do mercado
Carlos Eduardo Carvalho

This article stresses the pertinence of the concepts of indexed money, as well as of excessive liquidity of financial assets, for the analysis of stabilization programs in Brazil. Thc author criticizes the analysis of A. C. Pastore, who stresses the problems associated to the so-called “zeragem automática” (the automatic financing of financial institutions’ overnight positions by the Brazilian Central Bank throughout the eighties). It is argued here that the “run” of investors away from certain financial assets should be understood as increases in the number of transactions rather than merely as a larger demand for cur-rency, since the funds withdrawn return to the banks at once and withdrawals can be made even when undesired by the Central Bank. This article insists on the difficulties brought by combinations of a high amount of quasi-money with fiscal and exchange pressures that are strongly expansionary, including pressures arising from the servicing of the public debt, and suggests that such difficulties may have led the Central Bank to provide automatic financing as mentioned.

Vol.13, n.o1(49), 1993
Transparência do Banco Central: uma análise para o caso brasileiro
Helder Ferreira de Mendonça e Adriana Inhudes

Central Bank transparency: an analysis of the Brazilian case. Nowadays there is a tendency among central banks of increasing transparency in the conduction of the monetary policy. After the adoption of inflation targeting in Brazil there was an increase in the communication of the Central Bank of Brazil with the public. This paper makes a brief review of the recent theoretical and empirical literature concerning this subject. Furthermore, an analysis due to the transparency in the conduction of Brazilian monetary policy on important macroeconomic variables is made. The findings denote that an increase in transparency improves the behavior of several macroeconomic variables.

Vol.30, n.o1(117), 2010
Bancos públicos em sistemas financeiros maduros: perspectivas teóricas e desafios para os países em desenvolvimento
Jennifer Hermann

The paper discusses two theoretical approaches to the role of public banks (PBs): the Shaw-McKinnon model and an alternative Keynesian view. In the former, the PBs still in operation in less developing countries would be near to become fully unnecessary, in view of the advance of their financial development in the last twenty years. In the Keynesian approach this hypothesis is unlikely. Financial markets are viewed as structurally inefficient and “incomplete” for the requirements of the process of economic development. Nevertheless, it is undeniable that economic and financial development will require a definition of new strategies for PBs. The paper is concluded with a brief discussion of this issue.

Vol.31, n.o3(123), 2011
Central banking, democratic governance and polítical authority: case of Brazil in a regional perspective
Lourdes Sola, Christopher Garman e Moises Marques

By examining the relationship between democratic governance and monetary authority this paper accomplishes two principal tasks. First, it justifies placing the study of monetary authority as a central item on the research agenda of political scientists. Beginning from the premise central banks constitute a special mode of political authority, we examine trade-offs between questions of transparency, democratic accountability, and public sector efficiency. Second, by conducting an empirical study of monetary authority for the Brazilian case, the paper inverts a common held assumption within the study of central banks. Rather than argue price stability follows from an autonomous central bank, the Brazilian case demonstrate nearly the opposite can take place.

Vol.18, n.o2(70), 1998
A turning point in the debt crisis: Brazil, the US treasury and the World Bank
Luiz Carlos Bresser-Pereira

This paper is an account of the Brazilian 1987 negotiation of the debt crisis, that represented a turning point in the history of this world financial crisis. When the author assumed the Finance Ministry of Brazil, in April 1997, the country was in moratorium. The minister, after consulting international bankers, economists and state officials, prepared a proposal for solving the problem that was based in two key ideas: the securitization of the debt with a discount, and the relative delinkage between IMF and the commercial banks in the negotiations. In September 1997 the proposal received from the Secretary of the Treasury, James Baker, a public “non starter” answer, but, given the interest it immediately arose in the international financial community, eighteen months later the Brady Plan, that established the parameters for solving the debt crisis, had as core proposals these two ideas.

Vol.19, n.o2(74), 1999
In search of a monetary constitution for Brazil
Marcio Ronci

The present paper examines various episodes of the monetary history of Brazil and other countries as well as the recent empirical evidence to look into critically the two principal proposals of monetary constitution for Brazil: currency board and independent central bank proposals. We outline also a monetary constitution inspired in the Pandiá Calógeras' Monetary Project (1926) with the only purpose of shedding light on the basic principles involved in the design of a monetary constitution aimed at controlling the power to create money and curbing inflation: (a) separation between the power to create money and the agents that determine public expenditure;(b) a clear monetary rule to constraint the power to create money; and (c) separation of the power to create money from the regulation and supervision of banks.

Vol.20, n.o1(77), 2000
Banking and regional inequality in Brazil: an empirical note
Marcos Lima e Marcelo Resende

The paper investigates a neglected aspect of regional inequality in Brazil, namely regional inequalities related to financial flows. A synthetic regional financial inequality index is proposed and calculated in a semester basis over the 02-1994/02-2000 period. The inequality measure attempts to capture to what extent deposits in a given state translate into credit operations in that locality. Two main results emerge. First, non-negligible inequality patterns emerge when one considers the segment of private banks and those are consistent with an important proportion of states with a predominantly exporting pattern, for which deposits surpasses loans in that locality. Second, if one focus on the segment of public banks, an opposite pattern appears,that is consistent with decision patterns that might have, in part, a regional development motivation.

Vol.28, n.o4(112), 2008
Crédito bancário corporativo no Brasil: evolução recente e perspectivas
Maria Cristina Penido de Freitas e Daniela Magalhães Prates

Corporate banking credit in Brazil. This article aims to analyse the evolution of the corporate banking credit market in Brazil during the recent cycle (january 2003 to june 2009) from a Keynesian theoretical reference point. The article focuses on the dynamics of the six major segments of this market (industry, commerce, services, infrastructure, real estate and rural sector), highlighting their main similarities and differences concerning the cyclical dynamics, the participation in the total corporate banking credit, the origin of resources, the composition of capital ownership and the performance of public and private banks. 

Vol.33, n.o2(131), 2013
Endividamento e acentuação da miséria
Pierre Salama

Today the indebtedment level is raised and the responsibility of this situation doesn’t fall back on International Monetary Fund or the banks. The indebtedment has origin in the functioning of accumulation regimes and in the economic policy followed inthe7O’s. The modification of world economic situation, the crossing of a indebtedment international economy with liquidity to a economy without liquidity are contributed so much to the debt become autonomous in relation to the productive system. The dolarização of economies and liabilities of public enterprises, the fall of real wages, the in-creasing impoverishment of new stratums of population, the aggravation of alimentary misery in the cities, constitute the consequences of this indebtedment.

Vol.5, n.o1(17), 1985
Revelações da crise: Moeda fiduciária e as relações Tesouro-Banco Central
Maryse Farhi

Revelations of the crisis: fiat currency and the Treasury/Central Bank relations. The current crisis shed a new light on issues that, previously, were not perceived as serious or important. It highlighted the close ties between fiat currency and government bonds denominated in it or, in other words, the relationship between Treasury and Central Bank. Two ill-conceived views of the “new consensus” on money that had turned into taboos were put in evidence. The first, derived from the quantitative theory, concerns the rejection of unsterilized monetary expansion; the second, directly related to the neoliberal ideology, prohibits or imposes strict limits on the role of central banks in the financing of public debts. 

Vol.34, n.o3(136), 2014
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