Master Bank: BC authorizes an increase of more than R$ 1 billion in the institution's capital
The Central Bank authorized an increase of R$ 1 billion in the capital of Master Bank, from R$ 3.763 billion to R$ 4.763 billion. The measure was published in the Official Gazette of the Union (DOU) this Monday, 4.
This is the second capital increase of R$ 1 billion at the bank this year. The injection of R$ 2 billion was one of the requirements made by the Bank of Brasília (BRB) to purchase assets from Master. The operation is under analysis by the BC.
The amount was a commitment agreed upon by Master’s controllers with the BC to capitalize the bank itself.
Last Friday, the 1st, the National Monetary Council (CMN) decided to change the rules of the Credit Guarantee Fund (FGC), in an attempt to send a message that other financial institutions should not follow the same business model as Master.
The contribution of institutions with more guaranteed issuances to the FGC was increased. And the resources obtained from these issuances began to be directed to federal public bonds, liquid assets, and insurance.
The FGC's exposure to Master has been a source of concern. The institution grew by selling certificates of bank deposits (CDBs), guaranteed by the FGC, with rates much higher than the market, and invested the captured resources in assets considered risky, such as precatories, pre-precatories, and shares of troubled companies.
The FGC is a private fund, with resources from the financial institutions themselves, which guarantees investors payment of up to R$ 250,000 per CPF, per financial institution, in case of the bankruptcy of these institutions.
Source: Estadão
"We are witnessing yet another chapter of 'facade capitalism': a private sector that thrives on creating risks for high profits but relies on indirect guarantees from the system to socialize losses. The case of Master Bank is a warning: when market freedom is used to exploit loopholes instead of generating real value, the state becomes an accomplice to the collapse."
