Download Microfinanças: quais os resultados dos programas?

Crisis in Brazil:
Measures taken and MFIs
Brazilian Central Bank
An outline of Brazil
(before crisis)
• High international reserves: USD 205 billion
• Public sector is net foreign creditor
• International credit market responsible for 19% of Brazil’s
credit supply
• Companies: exposure to foreign exchange risk
(derivatives)
before crisis
Crisis immediate effects
• Liquidity squeeze
• Public deposits: preference for bigger institutions;
• Capital Repatriation
• Export credit lines suddenly cut
• Decrease in commodities prices and demand
• Searching for foreign exchange risk hedging
• Extra demand in domestic credit market
• Tightening of financial institution’s credit policy
•
Liquidity Squeeze
cash
treasure
bonds
Before
After
Prepayment of future
contributions, with
reduction in
compulsory. BRL 5.4
billion
Measures
Deposit Insurance Fund
Buys
institutions’
credit book
• non-profit private
entity
• regulated
Provides
coobligation to
their funding
operations
Close monitoring by supervision
Non-banking financial institutions
•Off-site analisis
•Logit econometric model = giving probability of
asking for DIF operations
•extra information, cash flow, questionaire
Measures –
Foreign currency market
Pressure on Real (depreciation)
Instruments:
• Sell of USD 14 billion (ending in feb/09)
• Repo operations of USD 11.8 billion (to mantain reserves)
• Exchange rate swap (Paying ∆FX, receiving interest rate)
Annouced BRL 50 billion; performed 12 billion, 6 billion prepaid)
Other measures
Changes in the last resort lending rules:
• Longer terms;
• Reduction in the compulsory reserves during
analysis period;
• Regulatory authorization to impose restrictions in
financial institutions’ management;
• No cases of use
Tax reduction for some industrialized
products (Not Central Bank):
• Auto;
• Construction materials,
• Domestic equipment
A difference from the
others crisis:
Public sector is net creditor in USD
External
Shock
less
confidence
PRESSURE
ON Reais
PUBLIC
DEBT/GDP
RATIO
FX
depreciates
Fx public debt
Deposit Insurance Fund
BRL billions
Sep/2008
Jun/2009
∆
Equity
17,4
20,6
18,4%
Liquid assets
16,9
24,7
46,1%
Credit Market:
stock hasn’t decined
Conclusion
•Strong signals of proper market funcioning;
•GDP increasing for the second consecutive trimester;
•Maintainance of pre-crisis levels of credit in the economy;
•This level is manteined by both foreign and private banks. and
is increased in estate owned commercial banks
•Supervised MFIs virtually non-affected.
•Coooperative system expanded credit stock by 16,7% in one
year (jun-09), while keeping confortable financial cushion.
Thank you!
Fabiano Coelho
Difis/Desuc
Deputy Advisor
[email protected]