The federal government controls some commercial banks

and other financial institutions. Government-owned banking

institutions play an important role in the Brazilian banking

industry. These institutions hold a significant portion of the banking system's total deposits and total assets and they have a stronger presence in markets such as residential mortgage and agricultural lending than private sector banks. In addition, the development banks act as regional development agencies.

Public Sector

The federal governments controls some commercial banks and other financial institutions.

Government-owned banking institutions play an important role in the Brazilian banking industry. These institutions hold a significant portion of the banking system's total deposits and total assets and they have a stronger presence in markets such as residential mortgage and agricultural lending than private sector banks. In addition, the development banks act as regional development agencies.

The three main public financial institutions controlled by the Brazilian government are:
Banco do Brasil, which provides a full range of banking products to both the public and private sectors.

Banco do Brasil is the largest commercial bank in Brazil and the primary financial agent of the Brazilian government;
BNDES, a development bank which provides medium- and long-term financing to the Brazilian private sector, mainly in the industry sector. BNDES provides funding both directly and indirectly through onlending by other public and private sector financial institutions; and
Caixa Econômica Federal, which is involved principally in deposit-taking and provides financing for housing and urban infrastructure.

Private Sector

The following are the most important types of private sector financial institutions:

multiple-service banks, such as Unibanco, which are licensed to provide a full range of commercial banking, investment banking (including securities underwriting and trading), consumer finance and other services;
commercial banks, which are primarily engaged in wholesale and retail banking. They are particularly active in taking demand and time deposits and lending for working capital purposes; and
investment banks, which are principally engaged in underwriting securities and structured transactions.

Principal Regulatory Bodies

The National Financial System is composed of the following regulatory and inspection bodies:

the National Monetary Council (Conselho Monetário Nacional-CMN);
the Central Bank (Banco Central);
the Securities Commission (Comissão de Valores Mobiliários-CVM);
the Private Insurance Superintendency ("SUSEP"); and
the Complementary Pension Secretariat.

The CMN, the Central Bank and the CVM regulate the Brazilian banking industry.

We summarize below the main functions and powers of each of these regulatory bodies:

 

 

Central Bank Securities Commission
- Implements the currency and credit policies established by the National Monetary Council	Monetary Council - Implements the securities and exchange policies established by the National Monetary Council
- Controls and supervises all public and private sector financial institutions by	- Controls and supervises the Brazilian securities market by
- Having the power to authorize and approve: - the establishment and operation of financial institutions - capital increases by financial institutions - the establishment of branches and facilities in Brazil and abroad - mergers and acquisitions of financial institutions - amendments to by-laws of financial institutions - establishment or transfer of the principal place of business of financial institutions - merger, spin-off or acquisition transactions resulting in the change of control of financial institutions	Having the power to approve, suspend and cancel: - the registration of public companies - the authorisation for brokers and dealers to operate in the securities market - public offerings of securities
Establishing: - minimum capital requirements - compulsory reserve requirements - operational limits	Supervising the activities of: - public companies - stock exchanges - commodities and futures exchanges - market members
Requiring the submission of: - annual audited financial statements - semi-annual audited financial statements - quarterly revised financial statements - monthly unaudited financial statements	Requiring: - full disclosure of material events affecting the market - annual and quarterly reporting by public companies
Requiring full disclosure of: - all credit transactions - foreign exchange transactions - export and import transactions - any other related economic activity	Imposing penalties
Imposing penalties