Financial Institutions - Chapter 17 - Doing Business in Brazil
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Doing Business in Brazil - Looseleaf
Doing Business in Brazil - Electronic
A. TYPES OF FINANCIAL INSTITUTIONS
1. The Brazilian Financial System
17.101 Institutional commercial banking in Brazil began with the
establishment of Banco do Brasil in 1808. From its inception to liquidation in
1835, the bank provided banking services to both the crown and private
citizens. A second Banco do Brasil whose shares were held by the crown and
private investors was established in 1851. From 1850 to 1950, the
commercial banking sector remained fairly undeveloped, until the enactment
of Law No. 4595 of December 31, 1964 (the “Banking Law”) establishing
the legal infrastructure necessary for commercial banking to gain a foothold
throughout the country. In fact, the Banking Law, which established both the
Types of Financial Institutions [§ 17.105]
(Rel. 59–2011) 17-3Central Bank of Brazil and the National Monetary Council (CMN), remains
the primary regulatory framework in the financial system.
17.102 Until the establishment of the Central Bank of Brazil in 1964, the
Brazilian monetary authorities were the National Treasury and the
Currency and Credit Authority (SUMOC), a department of Banco do Brasil
(today, a federally owned and controlled financial institution). The National
Treasury was the body responsible for issuing currency. Monetary control
was entrusted to SUMOC, among other duties. The Banking Law assigned
to the National Monetary Council (CMN) and the Central Bank of Brazil
full authority to define regulatory policy, making the latter independent
from Banco do Brasil.
17.103 Three entities are charged with the regulation and supervision of
financial institutions, including banks: (a) the National Monetary Council
(CMN); (b) the Central Bank of Brazil; and (c) the Brazilian Securities
Commission (CVM) with respect to securities activities.1
1 If a bank opts to also have an investment banking department (thus operating as a
multiservice bank), its investment banking activities will be subject to CVM
regulatory authority.(a) The National Monetary Council
17.104 The National Monetary Council (CMN) is the board charged with
the overall formulation of economic and financial policy, including
monetary, credit, and public debt policies.1 CMN members include the
Minister of Finance, who presides over its meetings; the Minister of
Planning; and the Chairman of the Central Bank.2
1 Banking Law, arts. 2 and 3.
2 Law No. 9069 of June 30, 1995, art. 8, as amended.
(b) The Central Bank of Brazil
17.105 The Central Bank of Brazil is responsible for execution of the
monetary policy, and is the prime regulator and supervisor of banks and
other financial institutions. As the agency charged with coordination of
monetary policy, it is incumbent on the Central Bank to implement
exchange controls; to regulate foreign investments; and to regulate and
supervise public and private sector banks and other financial institutions.
The Central Bank of Brazil, which operates as an independent agency
(autarquia), is administered by a board of governors consisting of a
chairman and eight governors, all appointed by the President of the
Republic and subject to Senate approval.1
Pinheiro Neto - Advogados, established in 1942, is Brazil's leading commercial law firm with offices in Sao Paulo, Rio de Janeiro and Brasilia. The founding Editor of this publication, the late J.M. Pinheiro Neto, was the Legal Advisor to the British Chamber of Commerce in Brazil.
J.M. Pinheiro Neto, K.B.E. Law degree, University of São Paulo, class of 1938; State
Attorney for taxes, 1945-1955; worked for the BBC during 1940-41 in England;
awarded the Medal for Services to the Cause of Freedom in 1945; President of the
Anglo-Brazilian Cultural Society, São Paulo, since 1965; Member of the Council of the
British Chamber of Commerce in São Paulo and of the American Chamber of
Commerce, for many years; Director of numerous Brazilian companies; Senior
partner of the firm.
Aleksas Juocys. Law degree, University of São Paulo, class of 1958; Specialized in
tax matters, and head of the tax section of the firm.
Hélio Nicoletti. Law degree, Catholic University, São Paulo, class of 1963,
Postgraduate course in business administration, Fundação Getulio Vargas, São
Paulo, 1967; Head of one of the mergers and acquisitions groups, corporate work,
of the firm.
Antonio Mendes. Law degree, University of Franca, São Paulo class of 1964; Master
of Comparative Law, Duke University, Durham, North Carolina, U.S.A.; Head of the
banking and finance group of the firm.
Celso Cintra Mori. Law degree, University of São Paulo, class of 1968; Head of the
litigation group of the firm.
José Roberto Pisani. Law degree, University of São Paulo, class of 1972; postgraduate
courses in tax law, Catholic University, São Paulo. Head of one of the tax groups of the
Antonio J. Peres Picolomini. Law degree, Catholic University, Campinas, class of
1968; Head of the labor and labor litigation group of the firm.
Noemia C.M. de Oliveira Novaes. Law degree, University of São Paulo, class of
1971; Specialization in International Law, University of Geneva, Switzerland; Partner
with Pinheiro Neto-Advogados; Experience in the computer science, technology
transfer, and trademark and patent areas.