Brazil established new standards that raise the minimum capital required financial institutions to operate in the country at 9.1 billion reais (1.68 billion dollars), from 5.2 billion reais, the Central Bank of Brazil reported this Monday.
Around 500 companies could be affected and the changes could encourage market exits, mergers or corporate restructuring, the central bank said in a statement.
The new framework will base minimum capital and net worth requirements on the activities carried out by institutions, rather than on their classification.
Entities that use the term “bank” or similar expressions in their name will be subject to a additional capital cushionhe added. The rules will come into effect immediately, with phased implementation until January 2028.
