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Impediments to the development and efficiency of financial intermediation in Brazil


  • Beck, Thorsten


Reforms to improve both the level and the efficiency of financial inter-mediation in Brazil should be high on Brazilian policymakers'agendas, because of the financial sector's importance to economic growth. This means that Brazil must also improve the legal and regulatory environment in which its financial institutions operate. Brazil is weak in important components of such creditors, the enforcement of contracts, and the sharing of credit information among intermediaries. Recent reforms, such as the extension of alienacao fiduciaria to housing, the introduction of cedula de credito bancario, the legal separation of principal and interest, and improvements in credit information system, are useful steps in strengthening the framework. But more is needed. Reforms that will significantly increase the level and efficiency of financial inter-mediation, and have a positive impact on economic growth include: 1) A more efficient judicial sector and better enforcement of contracts. 2) Stronger rights for secured and unsecured creditors. 3) Stronger accounting standards and practices, to improve the quality of information available about borrowers. 4) The development of a legal and regulatory framework that facilitates the exchange among financial institutions of both negative and positive information about borrowers.

Suggested Citation

  • Beck, Thorsten, 2000. "Impediments to the development and efficiency of financial intermediation in Brazil," Policy Research Working Paper Series 2382, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2382

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    References listed on IDEAS

    1. Demirguc, Asli & Huizinga, Harry, 1999. "Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence," World Bank Economic Review, World Bank Group, vol. 13(2), pages 379-408, May.
    2. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. " Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    3. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    4. repec:elg:eebook:17119 is not listed on IDEAS
    5. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series,in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084 Central Bank of Chile.
    6. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    7. Boyd, John H. & Levine, Ross & Smith, Bruce D., 2001. "The impact of inflation on financial sector performance," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 221-248, April.
    8. repec:hrv:faseco:30728041 is not listed on IDEAS
    9. Armando Castelar Pinneiro & Célia Cabral, 1999. "Credit Markets in Brazil: The Role of Judicial Enforcement and Other Institutions," Research Department Publications 3066, Inter-American Development Bank, Research Department.
    10. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 1999. "A new database on financial development and structure," Policy Research Working Paper Series 2146, The World Bank.
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    Cited by:

    1. repec:eco:journ1:2017-04-31 is not listed on IDEAS
    2. Joe Crowley, 2007. "Interest Rate Spreads in English-Speaking African Countries," IMF Working Papers 07/101, International Monetary Fund.


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