Transcript Slide sem título - Banco Central do Brasil

Banco Central do Brasil
Autonomous Central Banks in Latin
America and their Contributions to the
Development of the Financial Market:
What are the Lessons?
November 2002
Structural Reforms
– Monetary Responsibility Law: aims to facilitate the task of introducing
appropriate regulations. Requires the regulation of Article 192 of the Federal
Constitution.
– Payments System: a new system was implemented on April 22, 2002, aiming
at reducing the systemic risk. The system is in line with BIS principles and
recommendations.
– Corporate Law: protection to the minority shareholders
– Bankruptcy Law: acts at the recuperation and the judicial liquidation of the
commercial and economic civil corporations. The current legislation applies
only to commercial activities.
– Corporate Governance (New Market): new rules in order to guarantee greater
transparency and security to the investors
Structural Reforms
– Prudential Regulations: Central Bank’s initiatives aim at providing a more
transparent and sound structure to the financial system:
• Deposit Insurance Fund - “FGC”
• Internal control system and liquidity risk framework
• Credit risk bureau and new credit risk classification: 9 categories (AA to H)
• Banking and non-banking consolidated balance sheet
• Improvements of the accounting rules of financial and derivatives instruments
enhancing transparency and accountability
• Requirement of independent auditing of financial statements for banking and nonbanking
• Basle Agreement Principles: Minimum Capital Requirement (11%)
• establishment of a maximum of 70% of total assets applied in the fixed assets,
decreasing to 60% on June 30, 2002 and 50% on December 31, 2002
• banking customer’s code
• Off-Site Supervision Department and Semestral Supervision Program - “PFS”: Global
Consolidate Inspections (IGC)
• PROER and PROES: sanitation process of either state public and private Brazilian
financial institutions.
Structural Reforms
– Banking Spread: measures that aim at the reduction of the banking spread in
Brazil:
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•
•
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•
soundness of the banking system
tax reform
increase of the competition between financial intermediaries
improvement of risk control and of banking supervision mechanisms
improvement of the credit instruments: derivatives of credits and mutual funds of
credits
– Transparency: improves the communication of the Central Bank with the
market participants
• Improves the two-way communication of the CB with the market:
 Investor Relations Group: Focus Report - English and Portuguese versions,
Survey on Market Expectations, meetings with foreign and domestic
investors
 Periodical meetings with chief-economists (quarterly)
• Working Papers e Technical Notes
• Inflation Report (quarterly) and Press Releases – Fiscal Policy, Monetary Policy,
Foreign Sector and Open Market (monthly)
• Copom Minutes (5 working days after the meeting)
• External auditing at the Central Bank
• Improvements at Central Bank website Time Series ( www.bcb.gov.br )
Inflation Targeting Regime
After
Before
Volatility - Coefficient of Variation*
Inflation
GDP Growth (seasonally adj.)
Interest Rate
Average (Annualized)
Inflation
GDP Growth (seasonally adj.)
Interest Rate
Inflationary Inertia (monthly data)*
Inflation (t-1) - significant
(1994:4 1999:2)
(1996:1 - 1999:2 shorter period)
(1999:3 2002:2)
0.9
3.2
0.4
0.8
2.5
0.2
0.4
1.5
0.1
10.3
2.0
35.4
5.8
2.0
28.2
7.1
2.4
18.0
0.6
* standard deviation/average, quarterly data
**Data: 1995:08 - 2002:06 (equation also includes the exchange rate change in the previous 12 months
and the unemployment rate)
0.2
Exchange Rate Pass-Through
Exchange Rate Pass-Through to Administered Prices,
to Free Prices and to the IPCA (in 12 months)
Real Plan
Administered
Prices
Free
Prices
IPCA
Structural Model and Information
regarding Administered Prices
25%
12%
16%
VAR Model
20%
8%
14%
Estimation Model
Inflation Expectations: Under Control
12-Month Ahead Expected Inflation and Inflation Target
9
8
7
5
4
3
2
1
Central Target
Upper Limit
Lower Limit
Sep-02
Jul-02
May-02
Mar-02
Jan-02
Nov-01
Sep-01
Jul-01
May-01
Mar-01
Jan-01
Nov-00
Sep-00
Jul-00
May-00
Mar-00
0
Jan-00
% p.a.
6
Inflation Expectation