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Effects of the real plan of the Brazilian banking system

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  • Cysne, Rubens Penha
  • Costa, Sergio Gustavo Silveira da

Abstract

The aim of this paper is to assess the progress of the banking sector before and shortly after the Real Plan. We began by assessing the drop in the inflation revenues (negative real interest rates paid by the excess of demand deposits over total reserve requirements) as a result of the change in inflation from 40% a month for the pre-Real Plan period to a monthly average of 3.65% (IGP-DI), between July 1994 and May 1995. Then, using the financial statement data of a group of 90 banks, we attempt to estimate the net losses due to the inflation drop analyzing the profitability and other parameters of the banking industry. The calculations are made separately for private, state and federal banks. A later analysis on performance using information given to CVM (Securities Exchange Commission) by the six major private banks in the country is also discussed herein.

Suggested Citation

  • Cysne, Rubens Penha & Costa, Sergio Gustavo Silveira da, 1997. "Effects of the real plan of the Brazilian banking system," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 304, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
  • Handle: RePEc:fgv:epgewp:304
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    References listed on IDEAS

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    1. Ferreira, Pedro Cavalcanti Gomes & Jr., Roberto de Goes Ellery, 1996. "Convergência Entre a Renda Per-Capita dos Estados Brasileiros," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 16(1), November.
    2. Novaes, Walter & Werlang, Sergio, 1995. "Inflationary bias and state-owned financial institutions," Journal of Development Economics, Elsevier, vol. 47(1), pages 135-154, June.
    3. Carlos Henrique Corseuil & Gustavo Gonzaga & João Vitor Issler, 1996. "Desemprego regional no Brasil: Uma abordagem empírica," Textos para discussão 364, Department of Economics PUC-Rio (Brazil).
    4. Flôres Junior, Renato Galvão & Szafarz, Ariane, 1996. "Processus stochastiques en finance (2ème partie)," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 295, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    5. Cardoso, Renato Fragelli, 1995. "Profit sharing with heterogeneous entrepreneurial prowess," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 265, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    6. Castro, Hélio de Oliveira Portocarrero de & Oliveira, Luiz Guilherme Schymura de & Cardoso, Renato Fragelli & Magalhães, Uriel de, 1993. "Os sistemas previdenciários e uma proposta para a reformulação do modelo brasileiro," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 211, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    7. Castro, Hélio de Oliveira Portocarrero de & Oliveira, Luiz Guilherme Schymura de & Cardoso, Renato Fragelli & Werlang, Sérgio Ribeiro da Costa & Magalhães, Uriel de, 1994. "Regimes complementares de previdência," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 238, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    8. Ferreira, Pedro Cavalcanti & Ellery Júnior, Roberto de Góes, 1995. "Crescimento econômico, rendimentos crescentes e concorrência monopolista," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 270, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    9. Castro, Hélio de Oliveira Portocarrero de & Oliveira, Luiz Guilherme Schymura de & Cardoso, Renato Fragelli & Magalhães, Uriel de, 1993. "Previdência social pública: a experiência brasileira," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 210, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
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    Cited by:

    1. Baer, Werner & Nazmi, Nader, 2000. "Privatization and restructuring of banks in Brazil," The Quarterly Review of Economics and Finance, Elsevier, vol. 40(1), pages 3-24.
    2. Adriana Soares Sales & Maria Eduarda Tannuri-Pianto, 2007. "Explaining Bank Failures in Brazil: Micro, Macro and Contagion Effects (1994-1998)," Working Papers Series 147, Central Bank of Brazil, Research Department.

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