Brasília – The international financial crisis has prompted the Brazilian Central Bank to adopt a new measureto increase the volume of funds available in the market. The information was disclosed yesterday (2nd). Changes were effected to mandatory payments (a portion of the funds that banks are obliged to pay to the Central Bank) on government bonds. According to the press office at the Central Bank, the measure is going to issue up to 23.5 billion reais (US$ 11.7 billion) in government bonds in the market, which may be converted by the banks into money for circulation.
One of the new rules provides that banks will have the option of discounting, from some of the funds allocated to the Central Bank, the value of purchase of credit operations from other financial institutions, as long as the selling party has a capital of at least 2.5 billion reals (US$ 1.2 billion). In other words, the measure benefits small banks, which may sell their credit portfolios and count on greater funds, in addition to reducing the amount that large banks must receive.
The discount value will be limited to 40% of total mandatory payments to the Central Bank on credit deposits. The buyer institution will only be able to allocate 20% of the discounted limit for purchases of credit operations from another bank. Only credit operations originated at the selling financial institution until September 30th, 2008.
According to the Central Bank, only portfolio purchases that took place up to December 31st, 2008 will be considered. The Central Bank also informed that the measure applies to the period for calculation of mandatory payments ranging from September 29th to October 3rd, 2008, and for which adjustment should occur on October 10th, 2008.
*Translated by Gabriel Pomerancblum
