The Minister of Finance, Fernando Haddad, said this Friday (27) that the Banco Master crisis does not represent a systemic risk for the Brazilian economy, as it would be restricted to the Credit Guarantee Fund (FGC), which is maintained by financial institutions to cover possible breaks and liquidations in the system.
“There is no systemic risk because it is concentrated in the credit guarantee fund. It really hurts the Credit Guarantee Fund. It is taking 30 to 50% of the fund’s volume, but it is restricted to that. Now, this is a blow like we have never seen in the history of the Brazilian financial system”, he said in an interview with Flow Podcast.
Despite reinforcing that there is no systemic risk, he once again said that he considers the Banco Master case “the biggest banking fraud in the history of Brazil” and that the federal government “is 100% aligned in taking this [as investigações] to the end and within the law.”
During the interview, the minister stated once again that the Central Bank has begun to review the security standards of the financial system so that situations like this involving Banco Master do not occur again in the country.
“The loopholes that allowed Banco Master to carry out this operation can no longer exist. Some rules have already been changed by the Central Bank. The Central Bank is reviewing the rules so that this does not happen again”, he said.
Haddad said that he did not meet Daniel Vorcaro and that President Luiz Inácio Lula da Silva never had an official agenda with the owner of Banco Master, just one meeting in which the banker complained that he was being persecuted by big banks. In response to this, Lula reportedly said that, in his government, no one would be persecuted or favored – only the law would be followed.
“It appears that the president of the Central Bank was called [ao encontro] and President Lula said in front of both of them: ‘Look, there is no such thing in my government, there will be no persecution or favoritism. Whatever happens to your bank, it will be a technical decision made by an independent government body, which is the Central Bank, which has the autonomy to make whatever decision it wants. There will be no pressure on one side or the other. Whatever has to happen will happen in accordance with the law’. That was the only sentence the president said, according to reports from those who were there,” said the minister.
