By Marcela Ayres
BRASILIA, Jan 19 (Reuters) – Brazil’s Finance Minister Fernando Haddad has proposed expanding the central bank’s regulatory mandate to allow it to supervise investment funds, a role currently assigned to securities regulator CVM.
Speaking in an interview with local news outlet UOL on Monday, Haddad said the proposal is being debated within the government, with discussions involving the central bank, the Management Ministry and the solicitor general’s office (AGU).
Brazil’s federal police have pointed to the use of investment funds with cascading structures in their investigation into alleged irregularities involving Banco Master, which was liquidated by the central bank in November.
Haddad said the problems surrounding Banco Master are significant, but stressed that the case does not pose a systemic risk to the country’s financial system.
CVM, AGU, the central bank and the Management Ministry did not immediately respond to requests for comment.
PROBLEMS INHERITED
Haddad said that central bank Governor Gabriel Galipolo inherited a series of problems from his predecessor, Roberto Campos Neto, including issues tied to Banco Master, and the unanchoring of inflation expectations, which he said was largely fueled by statements made by central bank’s prior leadership.
Campos Neto was appointed by former right-wing President Jair Bolsonaro but served during leftist President Luiz Inacio Lula da Silva’s first two years in office. Galipolo, a Lula nominee, took over in January 2025.
Campos Neto, currently vice chairman at digital lender Nubank, did not immediately respond to a request for comment.
ROOM FOR MONETARY EASING
Haddad said he believes there is room for the central bank to cut interest rates, which are at a near-20-year high of 15%, unchanged since July in a bid to tame sticky inflation.
The finance minister also said the central bank is rebuilding its foreign exchange reserves, which he noted are becoming more diversified.
(Reporting by Marcela Ayres; Editing by Gabriel Araujo, Kirsten Donovan)
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