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Brazil's Financial System: Resilience to Shocks, no Currency Substitution, but Struggling to Promote Growth

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  • Ilan Goldfajn
  • Katherine Hennings
  • Hélio Mori

Abstract

Brazil has evolved a financial system with a smaller presence of public banks and larger participation of foreign banks, less directed credit, and well capitalized banks. Over the years it has been resilient to shocks and was able to preserve the real value of savings in the system, thus avoiding both dollarization and desintermediation. However, reducing the cost and increasing the volume of credit in the economy remains a challenge. Notwithstanding these hurdles, recent advances in the regulation of the financial system should pave the way for better intermediation and higher growth.

Suggested Citation

  • Ilan Goldfajn & Katherine Hennings & Hélio Mori, 2003. "Brazil's Financial System: Resilience to Shocks, no Currency Substitution, but Struggling to Promote Growth," Working Papers Series 75, Central Bank of Brazil, Research Department.
  • Handle: RePEc:bcb:wpaper:75
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    File URL: http://www.bcb.gov.br/pec/wps/ingl/wps75.pdf
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    References listed on IDEAS

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    1. Tarsila Segalla Afanasieff & Priscilla Maria Villa Lhacer & Márcio I. Nakane, 2002. "The Determinants of Bank Interest Spread in Brazil," Money Affairs, Centro de Estudios Monetarios Latinoamericanos, vol. 0(2), pages 183-207, July-Dece.
    2. Gerard Caprio & Patrick Honohan, 2008. "Banking Crises," Center for Development Economics 2008-09, Department of Economics, Williams College.
    3. John H. Boyd & Pedro Gomis-Porqueras & Sungkyu Kwak & Bruce David Smith, 2014. "A User's Guide to Banking Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 800-892, November.
    4. Honohan, Patrick & Klingebiel, Daniela, 2000. "Controlling the fiscal costs of banking crises," Policy Research Working Paper Series 2441, The World Bank.
    5. Marco Terrones & Luis Catão, 2000. "Determinants of Dollarization; The Banking Side," IMF Working Papers 00/146, International Monetary Fund.
    6. Hoggarth, Glenn & Reis, Ricardo & Saporta, Victoria, 2002. "Costs of banking system instability: Some empirical evidence," Journal of Banking & Finance, Elsevier, vol. 26(5), pages 825-855, May.
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    Cited by:

    1. Raquel de F. Oliveira & Rafael F. Schiozer & Lucas A. B. de C. Barros, 2011. "Too Big to Fail Perception by Depositors: an empirical investigation," Working Papers Series 233, Central Bank of Brazil, Research Department.
    2. Armando Castelar Pinheiro & Regis Bonelli, 2015. "Financial Development, Growth and Equity in Brazil," Discussion Papers 0159, Instituto de Pesquisa Econômica Aplicada - IPEA.
    3. Moyo, Clement & Khobai, Hlalefang & Kolisi, Nwabisa & Mbeki, Zizipho, 2018. "Financial development and economic growth in Brazil: A Non-linear ARDL approach," MPRA Paper 85252, University Library of Munich, Germany.
    4. Castro, Fernanda & Kalatzis, Aquiles E.G. & Martins-Filho, Carlos, 2015. "Financing in an emerging economy: Does financial development or financial structure matter?," Emerging Markets Review, Elsevier, vol. 23(C), pages 96-123.

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