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Impediments to the development and efficiency of financial intermediation in Brazil

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  • Beck, Thorsten

Abstract

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

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    5. Jappelli, Tullio & Pagano, Marco, 2002. "Information sharing, lending and defaults: Cross-country evidence," Journal of Banking & Finance, Elsevier, vol. 26(10), pages 2017-2045, October.
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    10. 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.
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    Cited by:

    1. Mr. Joe Crowley, 2007. "Interest Rate Spreads in English-Speaking African Countries," IMF Working Papers 2007/101, International Monetary Fund.
    2. Fatma Bouattour, 2020. "Measuring financial constraints of Brazilian industries: Rajan and Zingales index revisited," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 29(6), pages 677-710, August.
    3. Juliano J. Assunção & Efraim Benmelech & Fernando S. S. Silva, 2014. "Repossession and the Democratization of Credit," Review of Financial Studies, Society for Financial Studies, vol. 27(9), pages 2661-2689.
    4. Kenneth Majau Mugambi & A. van der Merwe, 2017. "Historical Incidences of Credit Rationing among Micro and Small Enterprises in Kenya," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 229-236.

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